Standard Chartered Sees New Growth Frontiers in Non-Stablecoin Tokenization
Standard Chartered’s recent research highlights a burgeoning trend in the tokenization of real-world assets (RWAs), predicting substantial growth beyond the current dominance of stablecoins. While stablecoins currently hold a commanding $230 billion market share, non-stablecoin RWAs represent a significantly smaller $23 billion market – approximately 10% the size. However, Standard Chartered anticipates a dramatic increase in this sector.
The report attributes this potential growth to two key factors: improving regulatory clarity and a shift in focus towards assets that genuinely benefit from on-chain existence. Tokenization, a primary application of blockchain technology, is increasingly attracting investment from traditional finance (TradFi) institutions. Stablecoins, cryptocurrencies pegged to assets like the US dollar or gold, facilitate international money transfers and play a crucial role in cryptocurrency markets.
Progress in regulation is evident in jurisdictions such as Singapore, Switzerland, the EU, and Jersey. Nevertheless, inconsistencies in Know Your Customer (KYC) rules pose a significant hurdle. Standard Chartered emphasizes the importance of focusing on assets where tokenization offers tangible advantages. Specifically, the report advocates for prioritizing on-chain assets that demonstrate cost reductions, increased liquidity, faster settlement times, or fulfill unique on-chain needs.
Tokenized private credit has emerged as a promising area, showcasing faster settlements and cost efficiencies. Conversely, attempts to tokenize already liquid assets like gold or US equities have yielded limited success due to a lack of clear on-chain benefits.
Standard Chartered projects future growth in non-stablecoin tokenization to center around private equity and liquid off-chain commodities. This strategic focus underscores the necessity of identifying assets where tokenization provides demonstrable value, moving beyond simple digitization to leverage the unique capabilities of blockchain technology. The bank’s analysis suggests a strategic shift away from tokenizing assets that already possess high liquidity off-chain, towards those where on-chain advantages are paramount. This targeted approach will likely drive the next wave of growth in the RWA tokenization market.
