Demand for tokenized real-world assets could reach $30.1 trillion by 2034, with trade finance assets making up a significant portion of the market, a paper from Standard Chartered and Synpulse predicts.
Currently, the tokenized asset sector mainly consists of traditional assets such as US treasuries and money market funds. However, the supply side is still in its infancy: the total value of tokenized assets (excluding stablecoins) was only $5 billion at the beginning of 2024.
However, the paper argues that the increasing digitalization of the industry and the specific characteristics of real-world trade finance assets make them an ideal category for token creation.
Currently, trade finance assets are under-invested due to lack of familiarity, pricing inconsistency and operational intensity. Tokenization has the potential to address these challenges while reducing information asymmetry and providing transparency to investors.
By 2034, trade finance assets could become the top three tokenized assets globally, accounting for 16% of the $30.1 trillion total, the authors predict.
Kai Fehr, global head of trading at Standard Chartered, says: “We see the next three years as a key turning point for tokenization, with trade finance assets coming to the fore as a new asset class.”
“To capture this trillion-dollar opportunity, industry-wide collaboration from all stakeholders, from investors and financial institutions to governments and regulators, is critical. Banks must increasingly take on the role of connecting existing traditional financial markets with a newer and more open token-enabled market infrastructure.”