RWA Tokenization Market Poised for Explosive Growth in 2025: New Report Highlights Key Trends and Industry Shifts
By FinanceFeeds Editorial Team
A new market outlook report, “RWA Tokenization: Key Trends and 2025 Market Outlook” from Brickken, sheds light on the rapid evolution of real-world asset (RWA) tokenization, projecting its market potential to reach between $30 trillion and $50 trillion by 2030. The fast-growing institutional blockchain adoption of tokenization will transform capital markets while creating enhanced market fluidity through expanded investment possibilities.
The authors Angkan Mukherjee, Jason Barraza, and Caleigh Crossman present the technological motivations behind tokenized assets entering mainstream financial operations through their report.
Key Findings from the Report:
1. Institutional-Grade Tokenization Gains Momentum
Large-scale tokenization efforts now take place through the combined efforts of **BlackRock and JPMorgan and Franklin Templeton and HSBC**. Institutional adoption advances through two examples showing how JPMorgan uses **tokenized auto loan receivables** while Franklin Templeton provides **the OnChain U.S. Government Money Fund** to integrate tokenized assets into financial structures.
The USD Institutional Digital Liquidity Fund (BUIDL) launched by BlackRock has secured $648.5 million assets under management (AUM) during its first six months of operation.
2. Various asset types have seen an expansion of tokenization processes throughout the market sector.
Real estate and private equity formed the initial focus of tokenization but the technology expanded to cover bonds, commodities, intellectual property, art, supply chain finance and carbon credits. The financial market landscape will transform through tokenized products because they enable token ownership and continual market access and better price identification.
3. The Rise of Tokenized Bonds and Debt Markets
The financial market for tokenized bonds continues to expand through substantial bond releases from worldwide governments together with corporations. HSBC acted as the principal bank behind a momentous digital green bond issuance worth $6 billion in multiple currencies during 2024 to demonstrate the market transformational capabilities of tokenization for speeding up the debt market’s procedure.
The ECB together with the BIS have introduced blockchain pilot initiatives to develop wholesale settlement systems which will enable state-backed digital securities.
4. Regulatory Clarity is Accelerating Adoption
The nations of Germany join Hong Kong and Switzerland and United Arab Emirates at the forefront of establishing legal systems for securities tokenization. The implementation of clear regulations by financial institutions has motivated confidence levels among institutions to expand their tokenized financial product range that now includes mutual funds and treasury bonds and structured investment vehicles.
5. Blockchain and Smart Contracts Powering Tokenization
The core innovations of blockchain technology enable RWA tokenization to reach new operational potential and security standards and cross-chain solutions. The document stresses several important points:
– Smart Contracts – Automating settlement, compliance, and profit distribution.
– Cross-Chain Interoperability – Facilitating liquidity across multiple blockchains.
Verification techniques for asset backing that provides transparent and verifiable proof are referred to as Reserve Audits together with Proof of Reserves.
Time-based settlement allows transaction fees to decrease while market inefficiencies from traditional systems to disappear completely.
6. Although 2025 presents an opportunity for analysis the market expects significant expansion through 2025 and the following years.
The market value of tokenized assets will advance beyond $50 billion in 2024 and such assets will potentially multiply 5-10 times during the following two years.
The market projection shows that tokenized private credit and alternative assets will grow extensively thus enabling institutional investors to find new ways to expand their portfolio diversity.
Asset management sector projects that over thirty percent of its members will introduce tokenized investment vehicles into their operations by 2026.
Future Outlook: A New Era of Digital Finance
Blockchain-based financial products keep gaining institutional support which leads tokenization to define the future development of capital markets. The merger of DeFi and TradFi technologies will result in liquid trading markets that grant investors easier access to flexible financial products.
The rapid expansion of RWA tokenization is fundamentally altering how capital is raised, traded, and managed,” said Angkan Mukherjee, Lead Author of the report. “As financial institutions, asset managers, and regulators embrace tokenized assets, we are witnessing a paradigm shift in market infrastructure that will define the next decade of finance.”
With recent cooling in economic growth, an uptick in unemployment, inflation moderating back to the Federal Reserve’s (Fed) 2% target, and expectations for rate cuts, we believe the winds are shifting in the U.S. fixed income market.
In our view, investors may need to adjust their sails to harness the shift in a way that could benefit their portfolios. As they chart a course in this new environment of lower economic growth and declining interest rates, we believe investors should consider an allocation to agency mortgage-backed securities (MBS).
Following are five reasons why we believe MBS are poised for relative outperformance.
1. Catching the interest rate downwind
As shown in Exhibit 1, the Fed’s benchmark interest rate is expected to be cut by more than 2% over the next 12 months.
If short-term rates do decline as expected and the yield curve steepens (i.e., yields on short-duration bonds fall more than yields on long-duration bonds), we believe securities such as agency MBS that have exposure to all parts of the yield curve (short, medium, and long) have a high probability of capturing the positive effects of interest rate cuts.
Additionally, we believe MBS can complement the shorter-duration and floating-rate exposures many investors have allocated to in recent years. Floating-rate bonds continue to offer attractive yields on the back of interest rates that are still at multi-decade highs. We believe investors should continue to lean into short-duration yields, while adding exposure to MBS to potentially catch the downwind of declining rates.
