The tokenization of real-world assets (RWAs) is exploding around the globe. Estimates estimate that this market can explode to $23.4 trillion by 2033. Dubai, meanwhile, is aggressively promoting itself as a global center for this nascent trend, kicking off a number of headline-grabbing RWA tokenization projects. Tokenized assets have a total market capitalization of $246 billion, according to rwa.xyz. Leading experts expect this number to soar in the coming years.

Our partner, the Boston Consulting Group (BCG), recently released a powerful report entitled ‘Approaching the Tokenization Tipping Point. This report provides important context and detail about the future of tokenization. The latest estimates indicate that the market cap for tokenized assets has already surpassed $246 billion. BCG’s estimate gets interesting — they contend the actual number is much higher, possibly $19 trillion. Even the most cautious scenario still has the market climbing to $12.5 trillion over the next ten years.

As this report states, tokenized assets are on the brink of a runaway takeoff, with more than half of all assets potentially tokenized well before 2033. Tokenization is expected to see the greatest growth in industries that it provides distinct and measurable benefits. Particular asset classes, like U.S. Treasuries and commodities, are projected to experience the greatest volume of tokenization activity.

Dubai has quickly established itself as a key hub in the burgeoning global tokenization ecosystem. The Dubai Land Department (DLD) has launched a real estate tokenization program, solidifying the emirate's commitment to innovation in the property sector. Dubai has already distinguished itself as the first city in the Middle East to issue title deeds on the blockchain.

“With the recent growth of RWA, people outside the crypto industry routinely ask [about] tokenized assets’ potential to address historically underpenetrated segments. Global adoption is poised to grow exponentially,” - Yue Hong Zhang, managing director at BCG Hong Kong

The growing use of tokenization is going to change our world and industries, across the board. According to BCG’s report, tokenized real-world assets (RWAs) are expected to be valued at roughly $600 billion by the end of this year. That’s great news for sustained growth right now.

According to the report, the evolution of tokenization will unfold in three phases. In preparation for the second phase, participants lean into safe early adoption. They are participants in small, experimental sandbox-type programs and they tokenize regulated vehicles like money market funds.

“Tokenization is growing in three phases, the report added. In the first, marked by low-risk adoption, most participants have engaged in limited pilots, tokenizing regulated instruments like money market funds. BlackRock’s $2 billion BUIDL fund has been the standout in this phase.”

The upcoming third phase will represent a major change, though. Tokenization will welcome even more illiquid asset classes, fundamentally reshaping how we hold and exchange these assets.

“Tokenization is advancing at different speeds across asset classes—fastest where it delivers real efficiencies and where conditions allow for secondary markets to emerge,” - Laurent Marochini, CEO of Standard Chartered Luxembourg