Standard Chartered (STAN) Sees New Growth Frontiers in Non-Stablecoin Tokenization

Stablecoins dominate the tokenization of real-world property (RWA), however Standard Chartered (STAN) mentioned it sees indicators of a broader shift underway.

With simply $23 billion presently in non-stablecoin RWAs, round 10% the dimensions of the stablecoin market, the funding financial institution anticipates vital development as regulatory readability improves and the main target shifts to property that profit extra meaningfully from being on-chain, it mentioned in a analysis report Wednesday.

Tokenization is without doubt one of the principal makes use of of blockchain expertise and it’s attracting consideration and funding from the TradFi world. Stablecoins are cryptocurrencies whose worth is tied to a different asset, such because the U.S. greenback or gold. They play a significant position in cryptocurrency markets and are additionally used to switch cash internationally.

Jurisdictions like Singapore, Switzerland, the EU and Jersey have made progress on regulation, the financial institution famous, however inconsistent know your buyer (KYC) guidelines stay a barrier.

Still, the chance lies in concentrating on property the place tokenization provides actual worth, the report mentioned.

“To unlock growth potential, we believe tokenization efforts need to focus on on-chain assets that are cheaper and/or more liquid than their off-chain equivalents, with shorter settlement times, or that solve an on-chain need,” wrote Geoff Kendrick, head of digital property analysis at Standard Chartered.

The financial institution famous that tokenized non-public credit score has proven promise by providing sooner settlement and value efficiencies.

In distinction, efforts to tokenize already-liquid property corresponding to gold or U.S. equities have seen restricted traction as they fail to ship clear on-chain benefits, the financial institution mentioned.

The financial institution expects non-public fairness and liquid off-chain commodities to be the following development areas for non-stablecoin tokenization.

Read extra: Stablecoin Market Could Grow to $2T by End-2028: Standard Chartered