Tokenized Bond Market Predicted To Reach $300 Billion By 2030

According to Cointelegraph, the tokenized bond market is projected to expand significantly, potentially reaching a valuation of at least $300 billion by 2030. This represents a 30-fold increase from its current size. Lamine Brahimi, co-founder of Taurus SA, a digital asset company, shared these projections, citing research from McKinsey. The $300 billion estimate encompasses government, municipal, and corporate bonds. Brahimi highlighted the advantages of tokenizing bonds, such as near-instant settlement times, reduced transaction costs, and the democratization of investment through fractional ownership. The broader category of tokenized real-world assets (RWAs), which includes bonds, stocks, stablecoins, and other tangible items, is expected to achieve a market cap of $10 trillion by 2030 as the global economy increasingly moves onchain. During a recent World Economic Forum summit in Davos, BlackRock CEO Larry Fink emphasized the potential of tokenizing all stocks and bonds onchain. He noted that this shift could democratize investment markets by lowering entry barriers. Data from RWA.xyz indicates that the tokenized US treasury sector currently boasts a market capitalization exceeding $3.4 billion, with the Hashnote Short Duration Yield Coin (USYC) holding the largest market share at over $1.2 billion. BlackRock’s United States dollar Institutional Digital Liquidity Fund (BUIDL) follows with a market cap of over $642 million. In July 2024, BUIDL became the first tokenized treasury fund to surpass the $500-million mark, maintaining its position as the largest tokenized treasury product until December 2024. Currently, $2.4 billion of the $3.4 billion in tokenized treasuries are hosted on the Ethereum network. Despite the promise of reduced transaction costs for both buyers and issuers, the tokenization of real-world assets faces challenges. Some pilot programs for tokenized bonds fail to fully leverage the permissionless and cost-saving features of blockchain technologies. The involvement of unnecessary human intermediaries in the bond tokenization process introduces redundancies, increasing costs and diminishing the value proposition of onchain finance.