Citi, the famous investment bank, thinks that tokenization based on blockchain for real-world assets will become the next killer use case in the crypto industry.
The firm has also forecasted that the market could easily reach between a sum of $4 trillion to $5 trillion by 2030. This, if true, would net an 80-fold increase from the current value of the assets that were locked on blockchains- something the investment bank went on to explain in its March report titled- Money, Tokens, and Games. The analysts at the firm stated that they were forecasting somewhere between $4 trillion to $5 trillion of tokenized digital securities, as well as $1 trillion of DLT or distributed ledger technology-based trade finance volumes by the next decade.
If the net reaches $5 trillion, Citi has estimated that around $1.9 trillion will be in the form of debt- with $1.5 trillion from real estate, around $0.7 trillion coming in from private equity, and around $0.5-1 trillion through securities. The above-mentioned research highlights that venture capital funds and private equity will turn out to be the most tokenized asset class- as they would be capturing 10% of the total addressable market, with real estate coming in at 7.5%. The markets of private equity will also be seeing a much faster rate of adoption because of the transparency, liquidity, and fractionalization of property which will be in their favor- according to the bank.
Citi further highlighted that the tokenization of blockchain will also be superseding the legacy financial infrastructure because it would be far superior technologically, whilst providing more opportunities for investment in multiple private markets.