Core Insights - The tokenization of real-world assets (RWAs) has rapidly gained momentum, achieving significant milestones in a short period, with a total market value of $29.27 billion as of September 12, 2023 [1][5][7] - Major asset classes in tokenization include private credit ($16.72 billion), U.S. Treasury bonds ($7.42 billion), and commodities ($2.01 billion), among others [1][5] - The development of asset tokenization faced challenges due to legal uncertainties and a lack of market infrastructure, but recent legislative changes have paved the way for growth [4][5][10] Market Overview - As of September 12, 2023, there are 389,136 asset holders and 211 issuers, including prominent asset management firms like BlackRock and Fidelity [1][5] - The market for asset tokenization has surged from $5 billion to nearly $30 billion in the past two years, indicating a strong upward trend [5][10] Historical Context - Early attempts at asset tokenization faced significant hurdles, including legal gaps and weak investor participation, leading to a high failure rate of projects [3][4] - Notable early projects included a luxury hotel and a student housing tokenization, both of which encountered liquidity issues and legal challenges [3][4] Legislative Developments - The passage of the GENIUS ACT in July 2023 has removed legal barriers for asset tokens and stablecoins, facilitating a more structured approach to asset tokenization [4][5] - BlackRock's issuance of U.S. Treasury tokens in March 2024 is a strategic move to demonstrate the feasibility of asset tokenization to both political and investment communities [4][5] Advantages of Asset Tokenization - Asset tokenization offers several advantages over traditional finance, including transparency through shared ledgers, flexible custody arrangements, programmability via smart contracts, and enhanced accessibility to financial markets [10][11] - The ability to fractionalize large assets allows for broader participation in financial markets, reducing barriers to entry for investors [10][11] Future Potential - The private market remains largely untapped, with significant potential for asset tokenization in areas such as private equity, private credit, infrastructure, and real estate [13][14] - BlackRock anticipates that the demand for U.S. infrastructure investment will reach $68 trillion from 2024 to 2040, highlighting a key area for future growth in asset tokenization [14] Regional Developments - Hong Kong's approach to asset tokenization differs from the U.S., focusing on a diverse range of asset classes and emphasizing the construction of a digital finance ecosystem [15] - The launch of the RWA registration platform in Hong Kong signifies a commitment to establishing standards and guidelines for asset tokenization [15] Impact on Financial Systems - The rise of asset tokenization and stablecoins is expected to disrupt traditional financial systems, potentially leading to a new international monetary and financial order [17][18] - Predictions suggest that the global market for tokenized assets could exceed $30 trillion by 2030, indicating a transformative shift in the financial landscape [17][18]

Core Insights - The article discusses the rapid growth of real-world asset tokenization, which has reached a market size of $29.27 billion as of September 12, 2023, with 389,136 asset holders and 211 issuers, including major asset management firms like BlackRock and Fidelity [1][4] - The article highlights the historical challenges faced by asset tokenization projects, with over 90% failing to achieve basic trading volumes before 2021 due to legal, market, and liquidity issues [3][4] Development of Asset Tokenization - The initial attempts at asset tokenization faced significant hurdles, including legal ambiguities, a weak investor base, and a lack of market makers or liquidity mechanisms [3] - Major investment institutions have been advocating for clearer legal frameworks to support asset tokenization, with the recent passage of the GENIUS ACT in July 2023 removing legal barriers [4] Advantages of Asset Tokenization - Asset tokenization offers several advantages over traditional finance, including shared ledger information, flexible custody arrangements, programmability through smart contracts, enhanced financial inclusion, and interoperability across blockchains [6][7] Potential of Private Markets - The article emphasizes the untapped potential of private markets, noting that a significant portion of companies with revenues over $100 million remain unlisted, particularly in the UK, EU, and the US [9] - BlackRock identifies four key areas for future investment in private markets: private equity, private credit, infrastructure, and real estate [9] Hong Kong's Unique Approach - Hong Kong's asset tokenization framework focuses on five asset categories: financial assets, renewable energy assets, real estate, intangible assets, and computing power assets, aiming for a more diversified and service-oriented approach [10][11] Future of Digital Finance - The article predicts that by 2030, the global market for tokenized assets could exceed $30 trillion, indicating a significant shift in the financial services landscape [13] - Asset tokenization and stablecoins are expected to disrupt the existing international monetary and financial systems, providing equal competition opportunities for various currencies [14] Stability of Stablecoins - The relationship between stablecoins and fiat currencies is crucial for their stability, with risks associated with maintaining a 1:1 exchange rate [15]

Core Insights - The rapid growth of real-world asset tokenization has reached a market size of $29.27 billion as of September 12, 2023, with 389,136 asset holders and 211 issuers, including major asset management firms like BlackRock and Fidelity [1][3] - The tokenized assets are primarily categorized into private credit ($16.72 billion), U.S. Treasury bonds ($7.42 billion), commodities ($2.01 billion), and alternative funds, among others [1][3] - The legalization of asset tokenization in the U.S. has been facilitated by legislative efforts, notably the GENIUS ACT, which has removed legal barriers and allowed for a surge in market activity [3][10] Group 1: Historical Context and Challenges - The journey of asset tokenization has faced significant challenges, with over 90% of projects failing to achieve basic trading volumes before 2021 due to legal uncertainties, weak investor participation, and lack of liquidity mechanisms [2][3] - Early attempts at asset tokenization, such as the St. Regis Aspen hotel project, faced liquidity issues and investor dissatisfaction due to complex structures and additional fees [2] Group 2: Advantages of Asset Tokenization - Asset tokenization offers several advantages over traditional finance, including shared ledger information that enhances transparency and reduces information asymmetry [4][5] - The flexibility in custody arrangements and programmability through smart contracts improve operational efficiency and user experience [6][7] - Tokenization enhances financial inclusion by breaking down large assets into smaller units, making them more accessible to a broader range of investors [6][7] Group 3: Future Potential and Market Trends - The private market holds significant untapped potential, with a focus on private equity, private credit, infrastructure, and real estate as key areas for future growth [8] - The global market for tokenized assets is projected to exceed $30 trillion by 2030, indicating a transformative shift in the financial landscape [10][11] - Hong Kong's approach to asset tokenization emphasizes a diverse range of asset classes and a focus on building a digital financial ecosystem, contrasting with the U.S. model [9][10] Group 4: Impact on Global Financial Systems - Asset tokenization and stablecoins are expected to disrupt the traditional dollar-based international monetary system, providing equal competition for currencies from other regions [10][12] - The evolution of a new international monetary and financial system based on blockchain technology is anticipated to occur more rapidly than previous shifts in economic power [12]

Group 1 - The core viewpoint of the report is that Robinhood's (HOOD.US) approach to virtual asset-related businesses serves as a reference for Chinese securities firms entering this sector, with potential enhancements in profitability through compliance, licensing, asset tokenization, and exploring PFOF business models [1] - The report highlights the rapid growth of the RWA (Real World Asset) market, which is expected to expand from approximately $5 billion in 2022 to $25.2 billion by July 2025, indicating a shift from experimental phases to large-scale promotion [1][2] - The report maintains an "outperform" rating for the brokerage sector, suggesting that there is still potential for significant gains within this industry [1] Group 2 - The asset tokenization market is projected to reach $16 trillion by 2030, accounting for about 10% of global GDP, driven by rising global interest rates, institutional involvement in crypto assets, and improving regulatory policies [2] - RWA offers advantages such as increased efficiency and reduced costs, facilitating financial globalization and decentralization, allowing institutional funds to access decentralized finance liquidity while maintaining compliance [3] - Tokenized securities transform illiquid assets into essential on-chain tools, enhancing trading efficiency and lowering operational costs through features like payment settlement and programmable compliance [3] Group 3 - The report identifies U.S. Treasury tokenization as a key category due to its low-risk attributes supported by U.S. government credit, alongside the potential for democratizing and globalizing stock ownership through tokenized stocks [4] - Robinhood's and Kraken's approaches to stock tokenization differ, with Robinhood focusing on derivative contracts representing digital certificates of rights, while Kraken's model offers a 1:1 token representation of underlying stock ownership [4]

Investment Rating - The report maintains an "Outperform" rating for the industry [3][5]. Core Insights - The overseas investment banks are increasingly participating in digital finance, with emerging models continuously surfacing. The focus is on the issuance and trading of digital assets, particularly Real World Assets (RWA), which signify a transformation of traditional investment banking into the digital finance realm. The RWA market has grown from approximately $5 billion in 2022 to about $25.2 billion by July 2025, indicating a shift from experimental stages to large-scale promotion [1][12]. - The RWA market is projected to reach $16 trillion by 2030, accounting for about 10% of global GDP, driven by factors such as rising global interest rates, institutional involvement in crypto assets, and improving regulatory policies [1][17]. Summary by Sections RWA: Bridging On-chain Funds and Real Assets - RWA represents tangible or traditional financial assets on blockchain networks, enhancing liquidity and enabling fractional ownership, thus democratizing access to previously high-barrier investments [12][16]. - The RWA market has seen rapid growth, with a total market size reaching $25.4 billion by mid-2025, driven by technological advancements and traditional financial institutions' involvement [12][13]. RWA Token Types and Development Momentum - The RWA token landscape includes various types, with U.S. Treasury tokens being a significant category due to their low-risk profile and established legal framework. The market for tokenized U.S. Treasuries grew from $100 million in January 2023 to $6.74 billion by July 2025 [22][23]. - Private credit tokens have emerged as the largest segment within RWA, with a market size of $15 billion as of July 2025, driven by their high yield and low correlation with other asset classes [27][28]. - Commodity tokens, particularly gold tokens, dominate the commodity tokenization market, which reached $1.75 billion by July 2025 [31][32]. Stock Tokens: Comparison of Tokenization Models - Stock tokenization is rapidly evolving, with platforms like Robinhood and xStocks offering different models. Robinhood's model is based on derivative contracts, while xStocks provides direct ownership representation through compliant third-party custodians [39][50]. - The largest stock token, EXOD, represents a company specializing in crypto wallets, with a market cap of approximately $277.1 million [41]. Investment Recommendations - The report suggests that Robinhood's approach to virtual asset-related business could serve as a reference for Chinese brokerage firms entering this space. The rapid development of RWA may catalyze further market activity in the brokerage sector, indicating potential for significant returns [3][4].