RWAs have been one of crypto’s main talking points since forever, it seems, yet only recently have we started to see real-world assets brought on-chain en masse.
The recent flurry of action on major exchanges like Kraken, BTCC, Bitget, and Bybit has cracked open markets once reserved for elites, with the tokenization of publicly listed companies proving an instant hit with investors. And stocks could just be the tip of the iceberg, with precious metals, real estate, treasury bills, and government bonds all ripe for tokenization.
Exchanges Bet Big on Tokenized Stocks
Long viewed as a vehicle for democratizing access to publicly listed company stocks, RWAs mostly remained in the realm of ‘What if?’ for an extended period. But all that is changing, and competition between rival exchanges is intensifying as more tickers come online.
BTCC, one of the world’s longest-running crypto exchanges, made headlines with its recent launch of tokenized futures for Chinese toy company Pop Mart International Group Ltd. (POPMART) and WTI Crude Oil (USOIL), with the pair racking up over $1 million in volume since June. Known for its high margin – up to 50x on stocks like Tesla and Apple, and 150x on precious metals – BTCC is a hit with traders eager for leverage while straddling the worlds of tradfi and DeFi.
Kraken, Bitget, and Bybit are also in on the action, with a panoply of tokenized trading options for stocks such as Netflix, Meta, Robinhood, Nvidia, McDonald’s, and Microsoft. With tokenized stocks, traders can benefit from near-instant on-chain settlement, 24/7 markets, and deep liquidity, giving them the chance to chase wins on both legacy and crypto markets.
In truth, stocks are just the most obvious investables to be tokenized. The question is, which exchange platform is likeliest to become the market leader as institutional gates swing open?
Beyond Stocks: The RWA Horizon
With public markets worth over $230 trillion, it’s little wonder tokenization has become such a focus for many exchanges formerly concerned with facilitating the trading of digital assets. Looking squarely at equities, the global stock market capitalization rose to an all-time high of $134 trillion last month, marking impressive YoY growth of 13.6%.
The tokenization wave isn’t stopping at stocks, though. This year’s landmark $3 billion deal between MultiBank Group, UAE-based real estate giant MAG, and blockchain L1 Mavryk marked the largest RWA initiative to date, with a raft of high-value properties coming on-chain. The move signals a future in which real estate, commodities, and art could flood blockchains, offering liquidity and transparency traditional markets simply cannot match.
With real estate tokenization, investors can make fractional purchases of exclusive properties, slashing barriers to entry and letting them profit from the upside during property booms. Commodities like gold and silver, which are already tokenized on several, are also increasingly of interest to even casual investors.
Some experts predict that up to 30% of global financial assets could be tokenized by the close of the decade, driven by regulatory clarity, technological advancements, and the increased appetite of investors to interact with Web3 platforms.
The Future of RWAs in Web3
As competition between platforms heats up, expect rivalrous regions to also make a play for dominance with the US facing competition from the likes of Singapore, the United Arab Emirates (UAE), and Europe. Expect innovation-friendly policies to be front of mind for developers and entrepreneurs looking to set up shop or expand their offerings.
It’s no exaggeration to say that RWAs could redefine not just crypto, but global markets. As one example, imagine the possibilities if tokenized equities were to be used as collateral for on-chain lending – it would supercharge DeFi like never before. With exchanges and blockchains doing battle, the race to tokenize the world’s wealth is just beginning.