According to a senior executive at crypto exchange Kraken, the industry has entered an “era of tokenization,” where blockchain technology can move assets almost instantaneously between platforms, a process that can take days or even weeks in traditional financial infrastructure.
The executive argued that tokenization removes long-standing frictions in markets that have remained largely unchanged for more than half a century. Trading tokenized shares can settle in seconds and does not require protracted clearing cycles that tie up capital and risk, he added.
As the expert asserts, tokenization can put a broad range of assets on-chain, from equities and precious metals to foreign currencies, giving investors and institutions new ways to allocate capital and tailor strategies.
The current market capitalization of tokenized assets is roughly $415 billion. Forecasts for market growth vary. Boston Consulting Group projects expansion to about $16 trillion by 2030, while McKinsey estimates that the market could approach $20 trillion but is unlikely to exceed that amount within the decade.
Financial regulators are also interested in tokenization. SEC Chair Paul Atkins has previously suggested that blockchain technology could be an effective way to modernize traditional capital markets, including those for equities and bonds.
