The crypto market has seen a surge in the tokenization of real-world assets (RWA) in 2024, with various entities in traditional finance (TradFi) also incorporating blockchain and asset tokenization into their portfolios. Victor Sanchez and Alan Keegan, the co-founders of Kinto, a blockchain project focused on RWAs, shared their insights with Cointelegraph Markets regarding the market potential of tokenized RWAs and why they believe major institutions like BlackRock are optimistic about this asset class.
Sanchez highlighted the advantages of RWAs, such as eliminating intermediaries, ensuring a highly liquid and efficient market, and providing transparent ledgers. He emphasized that RWAs and TradFi have discovered a secure and usable space in platforms like Kinto, leading to a 782% growth in tokenized treasury products in 2023.
Keegan discussed the reasons behind BlackRock’s bullish stance on RWAs, pointing out the multitrillion-dollar opportunity they present and the rapid advancements in blockchain technologies during bullish market cycles. He stressed the importance of leveraging blockchain’s capabilities to unlock liquidity from RWAs and enhance money managers’ bottom line.
The conversation delved into the benefits of on-chain transactions, such as global asset transfers with T+0 settlement, and the potential for improving various transaction types through blockchain infrastructure. The discussion also touched on the challenges of fragmented liquidity in RWAs and the need to bridge the gap between TradFi and DeFi.
Kinto aims to address compliance and counterparty challenges in RWAs by implementing a safety-first approach at the chain level. By enabling KYC/KYB processes on-chain, Kinto facilitates composability for RWAs, allowing for the creation of unique products on their platform.
While RWAs have primarily catered to institutional investors and fund managers, Kinto plans to expand its offerings to a wider audience by streamlining compliance requirements and security measures. The vision for full mainstream adoption of RWAs in TradFi includes tokenized assets being traded on-chain, seamless integration of financial services, and increased accessibility for retail investors.
In conclusion, the co-founders envision a future where traditional financial assets and services are seamlessly integrated into the blockchain ecosystem, offering a wide range of opportunities for investors and users alike. It is important to note that this article does not provide investment advice, and readers should conduct their own research before making any investment decisions.