Assets Worth Trillions of Dollars will be Tokenized by 2030, Citi Predicts
- Banking firm Citi predicts that by 2030, assets worth trillions would have been tokenized, marking an 80-fold growth for the industry.
- Blockchain-based tokenization of real-world assets is the next “killer use case” in the crypto space, said Citi in its “Money, Tokens, and Games” report.
- It predicts $1.9 trillion coming from debt, $1.5 trillion from real estate, $0.7 trillion from private equity, followed by $0.5–1 trillion from securities.
- Citi said that blockchain tokenization will prevent the need for costly reconciliation, prevent settlement failures, and increase the efficiency of operations.
The blockchain industry continues to grow, and many companies have tried to make their way into the world of digital assets and tokenization in the past few years. However, as per a statement from the American multinational investment bank and financial services corporation, Citi, the blockchain industry is expected to grow more in the coming years, with assets worth trillions of dollars being tokenized by 2030.
The New York-based banking firm explained in its “Money, Tokens, and Games” March report that blockchain-based tokenization of real-world assets is the next “killer use case” in the crypto space, and this industry could be worth between $4 trillion and $5 trillion by 2030. This would mark an 80-fold increase in the value of real-world assets locked on blockchains compared to their current values.
“We forecast $4 trillion to $5 trillion of tokenized digital securities and $1 trillion of distributed ledger technology (DLT)-based trade finance volumes by 2030,” said Citi analysts in the report.
Citi broke down its $5 trillion tokenization forecast into $1.9 trillion coming from debt, $1.5 trillion from real estate, $0.7 trillion from private equity, and $0.5-1 trillion from securities. The research also adds that private equity and venture capital funds will capture the biggest share of the industry’s total addressable market at 10%, followed by real estate, which is predicted to capture 7.5%.
Due to their favorable liquidity, transparency, and fractionalization properties, Citi claims that private equity markets will witness greater adoption rates among various sections of society. It is important to mention here that three private equity firms, KKR, Apollo, and Hamilton Lane, have already set their tokenization plans in motion with the launch of platforms like Securitize, Provenance Blockchain, and ADDX.
Citi also believes that, compared to the traditional financial infrastructure, blockchain technology and tokenization-based infrastructure would be far more efficient and provide more investment opportunities in private markets. The banking institution also claims that blockchain tokenization would prevent the need for expensive reconciliation, prevent settlement failures, and make tedious operations ever more efficient.
“Traditional financial assets are not broken, but sub-optimal as they are limited by traditional systems and processes,” Citi said. “Certain financial assets — such as fixed income, private equity, and other alternatives — have been relatively constrained while other markets — such as public equities — are more efficient.”
As reported earlier by BitcoinWisdom, last year following the price crash of Bitcoin (BTC), Citi stated that while there is still some interest in crypto assets from institutional investors, the overall uncertainty in the market is holding back many would-be adopters. The firm claimed that once all of the prevailing issues in the industry are removed, the adoption rate among institutions will rise in the long run.
Citi also recently announced that it will be selecting Metaco, a Switzerland-based firm, to provide digital asset custody services via its “Harmonize” crypto custody platform. With the partnership, the bank promised to offer a full range of crypto-asset custody services, from safe storage and insurance to transaction processing and reporting.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
