Tokenized Real-World Assets Market Value Reaches Over $12B Says Binance Research

The market value of on-chain real-world assets (RWAs), excluding stablecoins, has reached over $12 billion, showcasing continued interest from investors in tokenizing traditional assets on blockchain networks.

According to a study released on Friday by Binance Research, the overall value of Real-World Assets (RWAs) has exceeded a new high, reaching over $12 billion. This figure doesn’t account for the stablecoin sector, estimated at $175 billion.

Tokenization converts real-world assets like real estate, government bonds, stocks, and intangible assets such as carbon credits into digital tokens on a blockchain. This process makes traditionally illiquid markets easier to trade. It allows investors to purchase assets in fractions while facilitating clear records and streamlining the settlement process. The concept of tokenization is considered a trillion-dollar opportunity for the traditional finance industry’s transition to blockchain technology.

The report revealed that elevated interest rates had significantly influenced the growth of the tokenized Treasuries market in the U.S. “This growth has likely been impacted by U.S. interest rates being at a 23-year high,” Binance Research analysts noted. The federal funds target rate has remained steady at 5.25%-5.5% since July 2023, making U.S. government-backed Treasury yields appealing to many investors.

The Federal Reserve is expected to announce a rate cut soon, which may reduce the attractiveness of yield-bearing instruments, including tokenized Treasuries. Binance Research stated, “The size and regularity of any cuts will be crucial. As things stand, the major tokenized Treasury products yield between 4.5%-5.5%. Thus, it will take quite a few cuts before these yields become uncompetitive.” The report suggests that substantial rate reductions would be required to significantly diminish demand for tokenized Treasuries.

Binance Research also reviewed the on-chain private credit market and other tokenized assets like commodities and real estate. The on-chain credit market is currently valued at $9 billion, “just 0.4% of the traditional private credit market sized at $2.1 trillion in 2023.” The report identifies Figure, a fintech firm offering lines of credit collateralized by home equity, as the dominant player in the on-chain private credit market.

The report further noted growth in active loans from other participants, including Centrifuge, Maple, and Goldfinch, even when excluding Figure’s significant market share. These developments indicate that interest in on-chain private credit is expanding, with several projects making strides in this area.

The report also highlighted the participation of major financial institutions, such as BlackRock and Fidelity, in the tokenized asset space. This is in addition to crypto-native projects like Securitize and Polymath. According to Binance Research, increased interest rates in the U.S. have spurred the growth and dominance of the tokenized Treasuries market.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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