The tokenization of real-world assets (RWA) is poised for exponential growth, with Skynet forecasting a market size of $16 trillion by 2030, according to the 2025 Skynet RWA Security Report. This surge in tokenization is being driven by a combination of institutional interest and collaboration with the decentralized finance (DeFi) sector.
One key area of growth identified in the report is the tokenization of U.S. Treasuries, which is expected to reach $4.2 billion in 2025. Short-term government bonds are leading the way in this market, showcasing the rapid expansion of tokenized assets within the traditional financial landscape.
Institutional players from both traditional financial institutions and blockchain-native firms are driving this adoption of tokenized assets. They are leveraging RWA products for yield opportunities and liquidity management, with major banks and asset managers exploring tokenization across various asset classes, including debt instruments, commodities, private credit, trade finance, and money market funds.
The convergence of traditional finance and DeFi presents opportunities for enhanced efficiency, transparency, and accessibility in the tokenization space. Regulatory developments in key financial hubs such as Hong Kong, Singapore, and the U.S. are paving the way for broader institutional entry into the market.
However, despite the immense growth potential, the report also highlights several challenges that need to be addressed for the sector to reach its projected market size. These challenges include limited secondary market liquidity, varying legal treatment across jurisdictions, the need for standardized risk controls, cybersecurity vulnerabilities, and smart contract risks.
To overcome these challenges and achieve the forecasted market size, the report emphasizes the importance of infrastructure investments and regulatory clarity. It underscores the need for regulated custodians with robust security infrastructure, such as federally chartered crypto banks or firms licensed by reputable authorities.
As the market for tokenized real-world assets continues to expand, bridging the gap for retail investors to access these products will be crucial. Regulated intermediaries and simplified on-ramps aligned with existing investor protections may be necessary to facilitate broader participation in the tokenization space.
Institutions are exploring tokenization beyond government bonds to include assets like private credit, real estate, commodities, and intellectual property. Central banks and public institutions are also exploring tokenization to enhance collateral mobility, transparency in monetary operations, and boost market credibility.
Investors and issuers must consider tax and accounting implications for holding tokenized assets, as the treatment of RWA tokens may vary by jurisdiction and asset type. Valuation, reporting standards, and auditability are areas where current rules are still evolving to accommodate blockchain formats.
In conclusion, the tokenization of real-world assets presents a significant opportunity for both institutional and retail investors. With the right regulatory frameworks, infrastructure investments, and security measures in place, the market for tokenized assets is poised for substantial growth in the coming years.