The Tokenized Real-World Asset Market Reaches an All-Time High of $12B, Led by Treasuries and Private Credit

The real-world assets (RWA) market has reached an all-time high of $12 billion tokenized, according to a Binance Research report.

Key Takeaways

The real-world assets (RWA) market has hit an all-time high with $12 billion tokenized, Binance Research found.

The sector spans five main categories: tokenized treasuries, private credit, commodities, bonds and stocks, and real estate.

Main RWA categories

Tokenized treasuries have exploded in 2024, rising from $769 million at the start of the year to over $2.2 billion in September. The surge comes as US interest rates are at a 23-year high, with the federal funds target rate holding steady at the range of 5.25 to 5.5% since July 2023.

Private credit, which the International Monetary Fund (IMF) estimates to be worth over $2.1 trillion in 2023, has seen its on-chain market grow to nearly $9 billion, up 56% over the past year.

The commodities category is largely dominated by tokenized gold products, with Paxos Gold (PAXG) and Tether Gold (XAUT) holding around 98% market share of the $970 million market.

The tokenization of bonds and stocks is much smaller than the other RWA verticals, with nearly $80 million in market cap.

The tokenized bonds market includes a few non-US products, such as European debt and corporate bonds. Meanwhile, the tokenized stocks market is largely defined by digital representations of Coinbase, NVIDIA, and S&P 500 on the blockchain, all issued by the RWA company Backed.

Institutions powering the tokenization

Institutional involvement has been a key growth driver. BlackRock’s BUIDL tokenized Treasury product leads the category with a market cap surpassing $500 million, while Franklin Templeton’s FBOXX is the second-largest, with $440 million market cap.

Interestingly, the growth in the tokenized US Treasuries sector is also prompting integrations with decentralized finance (DeFi) protocols, such as the lending protocol Aave. In a Aug. 26 proposal, the money market suggested using BUIDL shares to generate yield and aid in the stability of its stablecoin GHO.

Risks of a new industry

The report also covers risks within the RWA industry, starting with the centralization of protocols’ smart contracts and their architecture. However, Binance Research analysts find this unavoidable, given the regulatory requirements related to the tokens’ underlying assets.

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