Tokenized real-world assets (RWAs) will hit a $50 billion market cap by the end of this year, with U.S. Treasuries dominating the sector, a new report projects.
Titled “The Great Tokenization Shift: 2025 and the Road Ahead,” the report compared the ongoing tokenization of the financial market to the overhaul that the 2009 ETF revolution introduced to the financial market.
Compiled by digital currency market-making firm Keyrock and tokenization platform Centrifuge, the report projects a $50 billion market this year in a bullish scenario, driven by regulatory clarity, institutional adoption and DeFi integration.
Source: Keyrock
“All assets will eventually be tokenized because all assets will be digital,” Keyrock CEO Kevin de Patoul told CoinGeek.
“Tokenization of real-world assets (RWAs) is not just an improvement, but a profound shift in how real value moves across global systems, be it U.S. treasuries, equities, commodities, or private credit.”
The tokenized real-world asset market is currently valued at $18.85 billion according to analytics platform rwa.xyz. The sector has recorded steady growth over the past four years, but is still way off some of the industry’s ambitious projections, such as Boston Consulting Group’s (BCG) $18.9 trillion by 2030.
Private equity dominates the sector, accounting for 55% of all tokenized RWAs, with U.S. Treasuries and commodities as the other major assets.
However, according to the Keyrock report, U.S. Treasuries will flip the table, surging to a $28 billion market. Despite being a $28 trillion sector, it still suffers from inefficiencies, including slow settlements, fragmented liquidity and costly intermediaries.
Despite lagging behind private credit, tokenized U.S. Treasuries recorded accelerated growth in 2024, surging from $775 million to $3.97 billion. In the first three months of this year, their market cap has shot up nearly 30%.
Despite having an overwhelming lead today, private credit is expected to record modest growth for the rest of the year, according to the report. A bullish prediction places its market cap at $17.5 billion. However, tokenization could transform the sector, which is still marred by illiquidity, hefty investment minimums that lockout retail investors and unflexible multi-year lockups.
On the flip side, tokenized equities could become a mainstay despite only accounting for a $15 million market today. Limiting laws, infrastructural deficiencies, and regulatory scrutiny have stifled the sector’s growth. However, the Trump administration could roll out new friendlier laws that could allow investors to access tokenized stocks, catapulting the industry into a $1 billion sector, says the report.
The report excluded stablecoins, which have dominated the tokenized assets ecosystem. Despite recent market volatility, stablecoins boast a $229 billion market cap and an estimated 159 million holders. However, regulators have been tightening regulations around stablecoins, from MiCA in the EU to proposed bills in Hong Kong, South Korea, the U.K. and the United States.
BIS: Tokenization is the future
Elsewhere, the General Manager of the Bank for International Settlements (BIS), Agustín Carstens, hailed tokenization as the future of finance.
Carstens was part of a panel discussion at the IMF Spring Meetings in Washington this week, alongside Reserve Bank of Australia Governor Michelle Bullock and European Central Bank board member Piero Cipollone.
“Tokenization can really be the future of a financial system with a sophistication that today we cannot imagine,” he told the attendees.
Tokenization has been most prevalent in payments, Carstens went on. As they are conducted today, digital payments are cumbersome and costly as messaging, reconciliation and settlement are separate.
Due to these disparate processes, “many mistakes can be made, controls can be lost, especially on KYC,” he noted. Tokenization can solve this, enabling instant settlement.
Carstens, who leaves the BIS later this year, believes that tokenization can be the foundation of the unification of all financial processes. He pointed to the tech sector as a prime example: just over two decades ago, users needed different devices for the cameras, surfing the internet and making calls. Today, all this can be done from a single device.
“If we can do that in the financial system, we would make a huge breakthrough.”
Central banks must be at the frontline of the tokenization revolution, ECB’s Cipollone remarked. While the technology would change how banks and consumers interact with financial systems, the role of the central banks must remain intact to protect consumers, prevent credit risk and mitigate system fragmentation.
Watch: Tokenized was built with blood, sweat and tears
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