If you seek the trigger to lead the next leg of the crypto "bullish" market, it won't be Ethereum ETF approval or Bitcoin halving. It will be driven by real-world assets.

RWA tokenization, without exaggeration, can be called the hottest corner of the digital asset industry. The quarterly report of our partner, Stellar Development Foundation, looked impressive, unleashing $533.3m in the supply of real-world assets. Meanwhile, the total RWA payments volume reached $1.6 billion, which allows me to assume that tokenization of accounts and payments will evolve into the main tokenization segment. 

The success of Blackrock's BUIDL with its 381.76 million tokens leaves no doubt in anyone's mind about the future of the financial industry. With that said, the forecasts promising a $16tn business opportunity by 2030 start looking quite realistic, don't they? 

Seizing the tokenization opportunity: funds, commodities, and long-hanging fruits

The situation in financial markets is not a transient trend, as some may say. It is a transformative shift bridging traditional and digital financial worlds and paving the way for a new asset management era. In fact, it's not only about RWAs but also the whole crypto market that is booming. The tokenization market is expected to hit $5tn by 2030, led by stablecoins, CBDC, securities, private market funds, and real estate. However, the adoption of MiCA stands a good chance of accelerating and doubling those predictions.

The situation with mass tokenization is predictable, and the reasons behind it are obvious: 

• Blockchain technology offers a secure and transparent method for trading assets quickly 24/7. Most importantly, it ensures drastic cost reductions. The same report by Boston Consulting Group states that blockchains can ensure around $20 billion in annual savings. 

• Smart contracts allow assets to be programmed as apps, including auto-deleveraging (ADL) of at-risk positions and cross-collateralizing several debt positions. 

• The tokenization of funds reduces the number of operational layers and intermediaries involved in custody, settlement, trading, clearing, and reporting. This reduces fund settlement times from traditional T+3 to instant, not to mention the cost optimization achievable through blockchain. 

Obviously, tokenization is a wake-up call for the industry. Especially for areas like equity markets that have witnessed little to no innovation over the years. So, what's next?

1. There is a lot more work to be done in terms of effective and consistent global regulation that will empower companies and nurture innovation instead of hindering it. The MiCA framework is one of many steps that should be taken shortly. 

2. Development and launch of production-grade SaaS solutions to facilitate and expand the adoption of RWA tokenization.

3. Discovery of new use cases for tokenization, going far beyond art & collectibles, real estate, NFTs, and digital collectibles to help unlock new monetization opportunities. Agriculture and climate-focused projects are the most recent examples.

There are other scenarios that I'm going to discuss during a panel called "Unlocking Value: The Tokenization of Real World Assets" at the London Blockchain Conference 2024. If you plan to be there, join the conversation.