The benefits of tokenization are simple, the process will result in operational efficiencies, increased liquidity and accessibility, investment firm Bernstein said in a research report dated June 20.
Tokenization is the process by which real-world assets (RWA) are converted into blockchain-based tokens.
Bernstein estimates that the tokenization opportunity will reach $5 trillion over the next five years, driven by stablecoins, central bank digital currencies (CBDCs), private market funds, securities and real estate.
Currency tokenization via stablecoins and central bank digital currencies will be applied to on-chain deposits and payments, with approximately 2% of the global currency supply, or approximately $3 trillion, to be tokenized over the next five years. the report adds.
“Over the next five years, we expect stablecoins and CBDC circulation to swell, led by China’s CBDC program,” wrote analysts led by Gautam Chhugani. “Stablecoins and CBDCs, coupled with yield farming in decentralized markets, will compete with bank deposits as a vehicle for investment and savings.”
On the other hand, however, analysts pointed to the current regulatory uncertainty, stating that “tokenization using blockchain is an important step for policy makers to understand the benefits of blockchain and how crypto assets (virtual currencies) can be applied to blockchain operations. We only succeed when we value the essentials.”
“How policy makers regulate blockchain-based businesses will determine how they view the tokenization of real-world assets,” the report notes, adding that “regulations will determine the benefits of tokenization.” It can slow down,” he added.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Tokenization Could Be a $5T Opportunity Led by Stablecoins and CBDCs: Bernstein
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