A transformative shift is quietly reshaping global finance, driven by the rise of digital tokens. The once-niche market of turning real-world assets — like bonds, loans, and even gold — into blockchain-based digital tokens has exploded to a record $26.5 billion, marking a 70% surge since the start of the year. According to a report from Web3 powerhouse Animoca Brands, the rise of “tokenization” is no longer just a buzzword. It’s becoming a foundational shift in how assets are owned, traded, and valued in the digital age.
This technology, called ‘tokenization’, converts traditional investments like government bonds, private loans, and commodities into digital tokens that can be traded on blockchain networks. Think of it like creating a digital certificate of ownership that can be bought and sold online.
The growth potential appears massive. Researchers Andrew Ho and Ming Ruan found that today’s $26 billion market represents just a tiny slice of the traditional finance world, which holds about $400 trillion in assets. These include private credit loans, government debt, stocks, bonds, and commodities like gold and oil.
“The estimated $400 trillion addressable traditional finance market underscores the potential growth runway for real-world asset tokenization,” the researchers wrote in their report called ‘Tokenized Real-World Assets’.
From Niche to Mainstream: Big Finance Bets on Blockchain
Major financial giants are now racing to build comprehensive platforms that can handle the entire process from creating these digital assets to trading them. Companies like BlackRock, Franklin Templeton, and Apollo have entered the space, bringing institutional credibility to the emerging market.
Currently, two types of assets dominate the tokenized market. Private credit loans make up $15.1 billion of the total, while U.S. Treasury bonds account for $6.6 billion. Together, these two categories represent nearly 90% of all tokenized real-world assets.
The growth has boosted confidence among institutional investors who previously viewed blockchain technology with skepticism. The presence of established Wall Street firms has helped legitimize the sector and attract more traditional investors.
Ethereum leads the market with a 55% share of tokenized assets, holding $156 billion in total value when including stablecoins (digital currencies pegged to the dollar). When combined with Ethereum’s layer-2 networks like Polygon and Arbitrum, this share grows to 76%.
However, the researchers predict the future will be “multichain,” meaning different blockchain networks will compete for market share. High-performance networks are already challenging Ethereum’s dominance, suggesting that the ability to work across multiple blockchains will become crucial for success.
The tokenization boom has also lifted related cryptocurrency prices. Ethereum’s native token hit an all-time high on Sunday, while oracle provider Chainlink has seen strong gains as it provides essential data services for these tokenized assets.
Despite the impressive growth, experts believe this is just the beginning of a transformation that could eventually move trillions of dollars from traditional finance onto blockchain networks.
