BUILD

Franklin

2024

Reserve

BlackRock

The market for tokenized real-world assets, excluding stablecoins, has surged past $12 billion, according to Binance.
This growth is largely driven by tokenized U.S. Treasuries, with significant participation from major financial institutions such as BlackRock and Franklin Templeton, <a href="https://www.binance.com/en/research/analysis/rwas-a-safe-haven-for-onchain-yields" target="_blank" rel="noopener noreferrer nofollow">according</a> to a Binance Research report released on Sept. 13.&nbsp;
This total excludes the $175 billion <a href="https://crypto.news/tag/stablecoin" target="_blank" rel="noopener noreferrer nofollow">stablecoin</a> market, which remains separate from RWAs.
Tokenization is the division of <a href="https://crypto.news/what-is-tokenization-and-how-does-it-work/" target="_blank" rel="noopener noreferrer nofollow">traditionally illiquid assets</a>, such as <a href="https://crypto.news/tokenization-of-real-estate-evaluating-the-promise-of-securitization-opinion/" target="_blank" rel="noopener noreferrer nofollow">real estate</a>, government bonds, and commodities, into fractions, making them more accessible to a wider range of investors. It also streamlines processes like record-keeping and settlement, potentially transforming the trade and management of assets in traditional finance.
The market value of <a href="https://crypto.news/a-trillion-dollar-dream-why-experts-predict-the-1000x-increase-for-tokenized-treasuries/" target="_blank" rel="noopener noreferrer nofollow">tokenized U.S. Treasury funds</a> alone has exceeded $2.2 billion, according to the report.&nbsp;
<a href="https://crypto.news/tag/blackrock/" target="_blank" rel="noopener noreferrer nofollow">BlackRock’s</a> BUILD Treasury product leads the category with nearly $520 million in assets, followed closely by Franklin Templeton’s FBOXX with $434 million. This milestone was achieved in less than five months after the market reached $1 billion in late March, according to the report.
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<h2 class="wp-block-heading" id="u-s-interest-rates">U.S interest rates</h2>
The report noted that elevated U.S. interest rates have been a key factor in the expansion of tokenized Treasuries, offering yields that attract investors seeking stable returns.
However, the Binance Research report noted that <a rel="noopener noreferrer nofollow" href="https://crypto.news/bitcoin-and-altcoins-rise-as-nfp-data-point-to-a-large-rate-cut/">impending rate cuts</a> from the Federal Reserve could reduce the appeal of yield-bearing instruments like tokenized Treasuries. Even so, the firm indicated that significant reductions in rates would be necessary to materially impact demand.
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<h2 class="wp-block-heading" id="other-forms-of-rwas">Other forms of RWAs</h2>
In addition to Treasuries, the Binance Research report explored other segments of the on-chain RWA market, including private credit, tokenized commodities, and real estate.&nbsp;
The tokenized private credit market is valued at approximately $9 billion, but it still represents only 0.4% of the $2.1 trillion global private credit market in 2023.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 “Although the on-chain private credit market is only worth around 0.4% of this, at ~US$9B (2) , it has been growing and active loans are up by ~56% over the past year.”
 Binance Research
</blockquote>
<h2 class="wp-block-heading" id="risks-of-rwas">Risks of RWAs</h2>
Despite this growth, Binance Research highlighted several risks associated with RWAs.
First, RWA protocols often lean toward centralization due to regulatory requirements, <a href="https://crypto.news/money20-20-the-tokenization-industry-needs-to-address-interoperability-issues/" target="_blank" rel="noopener noreferrer nofollow">raising concerns</a> about control and transparency. They also rely heavily on off-chain intermediaries for asset custody, which adds layers of third-party dependence.&nbsp;
The complexity of these systems can <a href="https://crypto.news/tokenization-might-not-be-as-big-in-2030-as-you-think-heres-why/" target="_blank" rel="noopener noreferrer nofollow">sometimes outweigh</a> the yields they generate, the report noted, leading to questions about whether the returns justify the operational challenges.&nbsp;
Additionally, privacy and compliance remain key issues, with <a rel="noopener noreferrer nofollow" href="https://crypto.news/real-world-assets-2024-is-the-breakthrough-year-for-tokenization-opinion/">zero-knowledge technology</a> emerging as a promising tool for balancing regulatory demands and user autonomy.

Binance: Tokenized RWA market surpasses $12b, led by U.S. treasuries

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