Asset management firm Bernstein said in a research report released today that the benefits of tokenization are simple, the process brings operational efficiency, improved liquidity and accessibility.
Tokenization Could Be A $5 Trillion Opportunity Led By Stablecoins And CBDCs According To Bernstein
The report stated that about 2% of the global money supply, via stablecoins and CBDCs, could be tokenized over the next five years, amounting to approximately $3 trillion.
Tokenization is considered the process by which real-world assets are converted into blockchain-based tokens.
Bernstein estimates that the size of the tokenization opportunity could grow to $5 trillion over the next five years, led by stablecoins and central bank digital currencies (CBDC), private market funds, securities and real estate.
According to the report, currency tokenization through stablecoins and central bank digital currencies will see application in on-chain deposits and payments, with around 2% of the global money supply, or about $3 trillion, to be tokenized over the next five years.
“Over the next five years, we expect an increase in stablecoins and CBDC tokens in circulation, led by China’s CBDC programme,” analysts led by Gautam Chhugani wrote.
“Stablecoins and CBDC tokens, combined with yield farming in decentralized markets, will compete with bank deposits as an investment or savings tool,” analysts wrote.
Still, the broker points out the current regulatory uncertainty and says that “tokenization using blockchain can only be successful when policymakers appreciate the benefits of blockchains and that crypto tokens are an indispensable part of blockchain transactions.”
*Not investment advice.
