Wall Street Now Focuses on Tokenization as BlackRock Leads $10 Trillion Initiative

A recent report from October 16 highlights Wall Street's increasing interest in tokenization, driven by the benefits it offers for real-world assets (RWAs).

Firms are recognizing blockchain technology’s ability to enhance liquidity, reduce costs, and accelerate exchanges.

Tokenization transforms assets like real estate, art, and financial instruments into digital tokens, allowing for instant transfers and fractional ownership. This shift marks a departure from Wall Street’s initial skepticism toward digital assets, with companies now actively investing in cryptocurrencies.

A McKinsey study projects the tokenization market could reach $2 trillion by 2030, with some estimates suggesting it may hit $16 trillion as existing assets are integrated. Artificial intelligence is also expected to drive growth, exemplified by the partnership between SingularityDAO and Cogito Finance.

Regulatory clarity is essential for the industry’s future, especially in the U.S., while countries like Singapore are advancing their frameworks for tokenization.

Leading the charge is BlackRock, which aims to tokenize $10 trillion in assets. The firm has filed with the U.S. Securities and Exchange Commission for a new private equity fund focused on digital liquidity. CEO Larry Fink believes tokenization will revolutionize market transactions, enabling faster and cheaper settlements as the firm develops the necessary infrastructure and investor education initiatives.