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| ripple x BCG |
Report Predicts $18.9 Trillion Market by 2033
Ripple and Boston Consulting Group (BCG) have jointly published a report indicating a transformation of global financial markets, centered around the tokenization of real-world assets (RWAs).
According to the report released on April 9th, the tokenization market size is projected to expand significantly, from approximately $600 billion currently to $9.4 trillion by 2030, and further to $18.9 trillion by 2033. This growth represents a compound annual growth rate (CAGR) of 53%.
Three Phases of Tokenization Evolution
The report outlines the evolution of tokenization across three distinct phases:
- Phase 1: Foundational Phase - This initial stage focuses on the low-risk adoption of tokenization for familiar assets such as money market funds and bonds.
- Phase 2: Institutional Expansion Phase - This phase involves institutions scaling tokenization into more complex asset classes, including private credit and real estate.
- Phase 3: Market Transformation Phase - The final phase envisions tokenization becoming embedded throughout both financial and non-financial products, fundamentally reshaping market operations.
Currently, most companies are in Phase 1 or transitioning into Phase 2. Global asset management firms like BlackRock, Fidelity, and JPMorgan are already implementing early-stage tokenization solutions. Markus Infanger, Senior Vice President of RippleX, observed that "the market is transitioning from tokenized assets simply sitting on-chain to integrating into real economic activity."
Key Drivers of Tokenization Growth
The report identifies several key factors driving the growth of the tokenization market:
- Regulatory clarity established in key regions like the European Union (EU), the United Arab Emirates (UAE), and Switzerland, with expectations of similar clarity in the U.S. soon.
- Maturing technological infrastructure, including secure wallets and custody platforms.
- Strategic investments and mergers and acquisitions (M&A) involving banks and fintech companies.
- The "flywheel effect," where increasing supply and demand reinforce each other, accelerating market growth.
Tokenization: Transforming Financial Assets
Tibor Merey, Managing Director and Partner at BCG, emphasized that "tokenization is transforming financial assets into programmable and interoperable instruments, recorded on shared digital ledgers. This enables 24/7 transactions, fractional ownership, and automated compliance 1 procedures."