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]