The tokenization of real-world assets (RWA) has been projected to become a $5 trillion dollar industry, but without greater credit availability, certain changes won’t be meaningful. Ralf Kubli, board member of the Casper Association, warns that the emerging industry needs to focus on standardization to make our financial markets more efficient. “Let’s avoid the path where financial institutions merely upload financial statements to the blockchain and rethink the quality and types of information financial asset tokenization can provide, which will inevitably rewrite the rules on credit. Otherwise tokenization will only provide the level of transparency and trust as in existing markets — which haven’t truly improved since the informational deficits that drove the housing market boom and bust in the late 2000s. Do we really want to recreate the conditions that led to the Great Financial Crisis…?”
The founders of Swarm, a fully-regulated decentralized platform that tokenizes real-world assets for use in DeFi protocols, agree that standardization and regulation are critical for successful tokenization. They argue, “The standards for bringing assets on-chain need to be rigorous, and the onus is on those in the tokenization space to get this right. Failing to do so will result in a loss of confidence in the blockchain sector.” Blockchain-based credit marketplace Maple Finance has expanded to the U.S. market the opportunity for investors to access liquidity, and Backed, a developer of tokenized real-world assets (not available to U.S. investors, however), is expanding its products to new blockchains. Artory is also proud to announce key hires, growing the company’s blockchain and financial expertise.
However, Crypto X (formerly Crypto Twitter) had some cautionary takes on how the tokenization of real-world assets is progressing. Thiccy concluded his thread: “RWA stuff is a nice narrative and all, but the failures of Maple and now Goldfinch show that you’re completely shit out of luck if (or when, kek) the borrowers rug you. Why not buy foreign treasuries on-chain instead of lending to Kenyan motorbike companies?” As with any emerging technology, there will be bursts of enthusiasm and optimism, followed by criticism and stumbles. But inevitably, the pendulum will swing back.