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Ethereum, tokenized RWAs will became part of capital markets if…

2min Read

After tokenizing US treasuries, securities and money market fund, the next asset will be credit.

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  • RWA is still in the early stages, but the BlackRock move could increase momentum. 
  • Securitize founder believes that mainstream adoption is feasible if RWA hit $1 trillion mark. 

Carlos Domingo, Securitize’s founder and CEO, has reiterated that tokenized real-world assets (RWA) will gain momentum if they reach the $1 trillion milestone. 

Domingo, whose firm handles BlackRock’s tokenized BUIDL Fund tokens redemptions and placement, emphasized that; 

“For tokenized real-world assets, I think we’re in the early stages—like what crypto was before. Even if you add stablecoins, we’re still not at the $200B/$300B mark.” 

He added,

“As an industry, I think once we hit the $1 trillion mark of real-world assets on-chain, that’s when this becomes an important part of capital markets and financial services.”

However, the RWA segment could hit the $1 trillion milestone in the next 2-5 years. Especially as momentum picks up after BlackRock’s foray with its Ethereum [ETH]-based BUIDL Fund.

Beyond BUIDL Fund and tokenized US treasuries

After its impact on spot Bitcoin [BTC] ETFs, market watchers have keenly tracked BlackRock’s digital asset strategy. 

The move into tokenized real-world assets (RWA) through its Ethereum-based BUIDL (BlackRock USD Institutional Digital Liquidity) Fund has heated up tokenized US treasuries.

The overall tokenized US treasuries hit the $1 billion mark shortly after BUIDL’s debut, per Dune Analytics data

According to Domingo, with stablecoins’ total market cap of around $152 billion, adding $1 billion of tokenized US treasuries still makes the RWA less attractive to some players. 

However, Domingo highlighted that credit will be the next target in the tokenization pipeline after US treasuries and securities.

“Tokenized cash is number one. Then, tokenized treasuries and money market funds. But, then credit is the next one with less liquidity but higher yield.”  

Ondo Finance echoed a similar sentiment, noting that tokenizing a fraction of the US money market fund can tip the RWA sector to surpass even the BTC market cap. 

Citing a recent Cumberland report, Ondo highlighted

“Money market fund AUM at the beginning of 2023 was around $8.4T” and if 1.5% of that issuance were to move on-chain, it would be larger than the current market cap of stablecoins. If 7.5% of it moved on-chain, it would be larger than Bitcoin.”

To put it differently, tokenizing about 10% of money market fund AUM (assets under management) is enough to rival BTC. 

If BlackRock’s RWA move through BUIDL Fund attracts more players, the $1 trillion mark could be fast-tracked. 

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Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.
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