These RWAs include stocks, bonds, bank deposits and real estate, CoinDesk reported Friday (Aug. 1), citing Bank of America analysts.
Investors see opportunities in fractional ownership that broadens access to previously illiquid asset classes, as well as risks of disruption to financial institutions’ transaction services businesses, according to the report.
At the same time, there’s a growing belief that financial institutions will adapt to the growing use of blockchain technology, per the report.
The tokenization of RWAs is driving an on-chain revolution across capital markets, PYMNTS reported in April.
RWAs are tangible or intangible assets that have been tokenized and placed on a blockchain. Tokenization refers to the process of issuing a digital token that represents ownership or a claim on an underlying asset.
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Tokenization of these assets enables organizations and enterprises to take advantage of automated processes on various blockchains, and the tokenization of traditionally illiquid assets makes them easier to buy, sell and trade on secondary markets.
The President’s Working Group on Digital Asset Markets’ report “Strengthening American Leadership in Digital Financial Technology,” which was released Wednesday (July 30) by the White House, sets expectations for digital asset governance while signaling federal alignment on the need to facilitate innovation — particularly in payments infrastructure and tokenized financial instruments.
When asset manager BlackRock unveiled its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), Carlos Domingo, CEO of Securitize, BlackRock’s Web3 partner in the fund, said: “Tokenization of securities could fundamentally transform capital markets. Today’s news demonstrates that traditional financial products are being made more accessible through digitization.”
Reports over the last month or so said that JPMorgan is developing a new service to tokenize carbon credits, Kraken unveiled a platform allowing retail investors to buy tokenized versions of major U.S. equities, and Robinhood announced it was rolling out tokenized stocks to a select cohort of international users.
Each of these initiatives moves traditional financial services onto the blockchain, representing a coordinated push by financial giants to tokenize RWAs.
