- Chainlink could play a huge role in the rapidly growing tokenization market, which is driven by mutual funds, bonds, ETFs, loans, securitized assets, and alternative investments.
- Using Chainlink’s CCIP, Chainlink is positioned to be a critical infrastructure player.
The financial landscape is experiencing an unprecedented shift. Since the inception of blockchain technology, both the crypto and traditional finance worlds have been exploring asset tokenization to bring the benefits of digital assets to the traditional finance world.
This trend has been fueled by factors such as enhanced security, improved liquidity, and streamlined fractional ownership. Chainlink could most likely be in the crosshairs of the institutions’ arsenal.
The largest institutions and enterprises in the world are adopting tokenized assets.
5 recent industry reports examining the tokenization megatrend ↓… pic.twitter.com/Y2sOy65PeC
— Chainlink (@chainlink) August 13, 2024
EY Parthenon
A report from EY-PArthenon, a leading consulting management company, states that there is a growing appetite for tokenized assets. According to the report, investors are opting for tokenized assets, especially alternatives, due to their popularity as a means to diversify their investments.
According to the firm’s research, 50% of the institutions were interested in investing in tokenized assets in areas such as alternatives, public funds, real estate, and treasuries. Despite the consultancy firm backing tokenized assets, there are drawbacks. According to the firm, regulatory uncertainty combined with a lack of trustworthy partners remains a major hurdle in the growth of crypto and tokenization.
McKinsey
This sentiment has been echoed by McKinsey and Company, which is among the top three consulting firms in terms of revenue. According to the firm, Tokenized financial assets are rapidly transitioning from experimental “pilot to at-scale deployment.” Additionally, Real-world applications are gaining significant traction, demonstrating growth and increased viability.
According to the firm, they anticipate a market capitalization of approximately $2 million by 2030, excluding cryptocurrencies and stablecoins. This significant growth will be brought about by tokenizing Mutual funds, bonds, ETFs, loans, securitized assets, and alternative investments.
Additionally, from a more bullish point of view, the figure could double, driving the cricket cap to $4 trillion.
KPMG
KPMG, in collaboration with the Singapore FinTech Association, has added a rather interesting twist. Terming this as a “multi-trillion Opportunity,” the latter view tokenization as a fundamental change in asset management. Additionally, tokenization will open doors to greater efficiency, reduced costs, increased transparency, better risk management, and increased market liquidity.
KPMG confidently predicts that the 2030 market will see market cap grow by at least 28x to 80x of its current value.
Standard Chartered
Standard Chartered has come strong on the heels with a very bullish prediction. According to their 18-page report, the latter highlighted that “With the current market trends, we expect demand for overall tokenized real-world assets to reach up to USD 30.1 trillion by 2034″
Roland Berger
Adding to this chorus, Roland Berger’s report forecasts that by 2030, the majority of global value will be transacted through digital assets. This projection underscores the disruptive potential of tokenization and the vast opportunities it presents.
Chainlink’s CCIP Addresses Asset Tokenization
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) offers a solution to the challenges of managing assets across different blockchains. Chainlink’s CCIP ensures secure, traceable, and auditable transactions. Having a complex regulatory environment, Chainlink’s CCIP monitors and manages tokenized assets.
Additionally, Chainlink’s CCIP’s ability to bridge public and private blockchains is a game-changer. A single integration means reduced cost, simplified operations, and seamless integrations across various blockchain networks, making it the go-to place for tokenization.
At the time of writing, LINK is swapping hands with $10.60, marking a 2.46% surge in the last 24 hours.
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