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Crypto News – Standard Chartered Predicts $30 Trillion Tokenised Asset Market by 2034

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Crypto News - Standard Chartered Predicts $30 Trillion Tokenised Asset Market by 2034

Crypto News – Standard Chartered Forecasts Massive Growth in Tokenised Asset Market: $30 Trillion by 2034

Crypto News – A report by Standard Chartered, the market for tokenized real-world assets is projected to reach a staggering $30.1 trillion by 2034. This remarkable growth underscores the pivotal role of tokenization in revolutionizing global trade and finance, offering enhanced liquidity, accessibility, and efficiency.

The report sheds light on the increasing integration of digital assets into mainstream finance, highlighting the broader adoption and scalability of blockchain technology and decentralized finance (DeFi) applications. Kai Fehr, Global Head of Trade at Standard Chartered, remarked, “We see the next three years as a critical junction for tokenization, with trade finance assets emerging as a new asset class. To unlock this trillion-dollar opportunity, collaboration among all stakeholders, including investors, financial institutions, governments, and regulators, is essential.”

Transformative Potential of Tokenizing Trade Finance Assets

Standard Chartered’s analysis points to the transformative potential of tokenizing trade finance assets, which have traditionally been underinvested but offer strong risk-adjusted returns and low default rates. Tokenization allows for fractional ownership, operational efficiency, and improved financial market infrastructure, which analysts believe will unlock new opportunities for investors and help bridge the $2.5 trillion global trade finance gap.

The evolution of tokenization has been rapid, marked by significant milestones such as the introduction of Bitcoin in 2009 and Ethereum in 2015, which brought smart contracts and decentralized applications into the financial ecosystem. The report also highlights regulatory frameworks and industry collaborations, such as Project Guardian led by the Monetary Authority of Singapore, as evidence of the viability and benefits of tokenized assets.

Crypto News - Standard Chartered Predicts $30 Trillion Tokenised Asset Market by 2034

As the market for tokenized assets expands, Standard Chartered expects demand to soar. Projections indicate that 69% of buy-side firms plan to invest in tokenized assets by 2024, driven by the potential for reduced transaction costs, enhanced liquidity, and access to new asset classes. Despite the current market size of tokenized real-world assets being around $5 billion (excluding stablecoins), the potential addressable market, including trade finance gaps, is estimated to be $14 trillion.

Standard Chartered’s Tokenization Initiatives Highlight Practical Benefits and Call for Industry Collaboration

Standard Chartered’s initiatives, such as the successful pilot of asset-backed security tokens on the Ethereum blockchain, demonstrate the practical applications of tokenization in improving market access and operational efficiency. The report advocates for increased collaboration among financial institutions, regulators, and technology providers to create a supportive environment for tokenization, emphasizing the need for standardized processes, regulatory compliance, and interoperability.

In conclusion, the financial industry stands at a critical juncture. Tokenization is poised to revolutionize asset management, trade finance, and global economic activities. By embracing tokenization, Standard Chartered believes that stakeholders can enhance capital efficiency, broaden market access, and drive innovation, paving the way for a more inclusive and resilient financial ecosystem.

Frequently Asked Questions (FAQ) on Tokenized Real-World Assets and Standard Chartered’s Report

What are tokenized real-world assets?

Tokenized real-world assets are physical or financial assets that have been converted into digital tokens on a blockchain. This process, known as tokenization, allows these assets to be traded and managed more efficiently. Examples include real estate, commodities, and trade finance assets.

Why does Standard Chartered predict a $30.1 trillion market for tokenized assets by 2034?

Standard Chartered predicts this significant market growth due to the increasing adoption of blockchain technology and decentralized finance (DeFi) applications. Tokenization enhances liquidity, accessibility, and efficiency, making it an attractive option for investors and financial institutions.

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Crypto News - Standard Chartered Predicts $30 Trillion Tokenised Asset Market by 2034

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