Tokenization News Roundup: the ‘Next Trillion’
A weekly digest of articles, reports and analyses about tokenized RWAs, the fast-growing financial instruments that merge traditional finance to the blockchain.
The idea of tokenizing real-world assets – everything from homes, gold, art and collectibles to instruments like U.S. Treasuries and contracts – is gaining pace. Each week, we’ll be rounding up the most important news, offering you a snapshot of developments in this burgeoning space.
Tokenization Advocacy Group Wants to Bring the ‘Next Trillion’ of Assets to Blockchain
The Story: Crypto industry heavyweights including Coinbase, Circle and Aave have built a working group to encourage others to bring traditional financial assets on-chain. The Tokenized Asset Coalition aims to bring the “next trillion dollars of assets” into crypto through education and advocacy for tokenization, targeting both the world of decentralized finance (DeFi) and TradFi.
The Takeaway: While advocacy groups are not new to crypto, it is somewhat unusual to see an organization sprouting up to champion a specific sector. But the Tokenized Asset Coalition scores points for working with corporate entities, DeFi incumbents and relative newcomers to tokenization, which may help them win over crypto natives who have not always been open to the vector attacks that real world assets may bring. Of course, banks almost need no convincing: the Boston Consulting Group recently found tokenized assets could hit $16 trillion by 2030.
$500B Korean Asset Manager Mirae Taps Polygon Labs in Securities Tokenization Drive – CoinDesk
The Story: South Korea’s largest financial group Mirae Asset Securities is working with Ethereum scaling platform Polygon Labs to build RWA infrastructure. In particular, Polygon will act as a technical consultant for the recently founded Mirae Asset Security Token Working Group, which includes several other crypto and non-crypto companies working to build tools to issue, exchange and distribute tokenized securities.
The Takeaway: Tokenization is no doubt a cross-chain phenomenon, but a few blockchains including Polygon are emerging as early leads. For instance, the Monetary Authority of Singapore is using Polygon for its experimental tokenization initiative Project Guardian, as is top tier asset manager Franklin Templeton for its blockchain financial products.
LSE Group Plans to Offer Blockchain-Powered Market for Traditional Assets
The Story: The London Stock Exchange Group, the operator of one of the oldest stock exchanges in the world, has drawn up plans to offer blockchain-based versions of traditional financial assets. Though it isn’t interested in cryptocurrency per se, it has gotten religion over the benefits of tokenizing assets. The company is now considering spinning up a new digital assets unit for the blockchain-based markets business and is in talks with regulators across the U.K. government.
The Takeaway: LSE Group’s Head of Capital Markets Murray Ross told the Financial Times the company hit an “inflection point” after studying blockchain and found that “digital technology” can make trading “slicker, smoother, cheaper and more transparent.” It’s just the latest stock exchange to realize how tokenizing securities on-chain can improve performance for everyone. (Though interestingly, this week, the World Federation of Exchanges trade association published results from a survey of stock exchanges conducted before FTX imploded, and found that more than half were already offering or had planned to offer crypto-related products or services.)
Swift, Chainlink Tokenization Experiment Successfully Transfers Value Across Multiple Blockchains – CoinDesk
The Story: Chainlink’s initial experiments with interbank messaging system Swift have been successful, according to an Aug. 31 press release. The two firms, in conjunction 12 financial partners including BNP Paribas, BNY Mellon, The Depository Trust & Clearing Corporation and Lloyds Banking Group, successfully transferred tokenized value across multiple private and public blockchains using Chainlink’s Cross-Chain Interoperability Protocol.
The Takeaway: Banks in particular are increasingly interested in tokenization, and having the interbank communications standard, Swift, already engaged in pilot programs is affirmative. «For tokenization to reach its potential, institutions will need to be able to seamlessly connect with the whole financial ecosystem. Our experiments have demonstrated clearly that existing secure and trusted Swift infrastructure can provide that central point of connectivity, removing a huge hurdle in the development of tokenization and unlocking its potential,» Tom Zschach, chief innovation officer at Swift said in a press statement.
Visa Taps Solana and USDC Stablecoin to Boost Cross-Border Payments – CoinDesk
The Story: Visa is expanding its use of the USDC stablecoin to Solana to speed up certain types of cross-border payments, but its announcement revealed how fully integrated crypto is into Visa’s stack. The payments giant has used the Circle-issued stablecoin on Ethereum since a pilot program in 2021 for treasury management purposes. It is also piloting global debit and credit card payments programs with merchant acquirers Worldpay and Nuvei, an interesting new use case tethering blockchain to the real world.
The Takeaway: Visa, which claims to be one of the first major financial firms to tap Solana, is “leveraging stablecoins” to provide a “modern option” for clients to move money around, Cuy Sheffield, head of crypto at Visa, said in a statement. The cool thing is these funds are starting in Visa’s treasury, meaning they’re fully onboarded into the crypto economy. The stablecoin market can potentially grow to $2.8 trillion in the next five years as global financial and consumer platforms tap the tokens on public blockchains to power value exchange on their platforms, research firm Bernstein has said.