Tokenization Is on the Horizon. How Do We Get There?

Core Insights - Financial markets are evolving rapidly, with a significant shift towards tokenization of various assets and products, including stocks, bonds, and ETFs [2][4] - The tokenization process is expected to occur in two phases: first, established financial products will be placed on the blockchain, followed by the tokenization of the underlying assets, which will require a regulatory framework [3][4] - The real-world asset tokenization market is currently valued at approximately $24 billion, reflecting a 380% growth over the past three years, with projections suggesting it could reach $30 trillion by 2034, indicating a potential growth of about 125,000% [5] Industry Developments - Major financial firms are actively pursuing tokenization initiatives, with BlackRock working on tokenizing ETFs, and Goldman Sachs partnering with BNY Mellon to tokenize money-market funds [7] - Companies like Robinhood, Gemini, and Kraken have already initiated tokenized stock trading in Europe and are planning to expand these offerings to the US market [7] - There are concerns from Wall Street firms regarding the risks associated with an unregulated tokenization market, which could expose investors to hidden risks [7]