While the situation in the Middle East is tense and the cryptocurrency market is drawing much attention due to Saylor’s investment plan, the traditional financial giant HSBC’s judgment on the application field of blockchain has also cast a new variable for the development of the crypto industry. Golden Finance reports that HSBC Hong Kong is actively engaged in the application practice of blockchain technology in key areas such as custody, tokenization and bond issuance. It further predicts that the tokenization process of real-world assets (RWA) on public chains will experience explosive growth in the next 2 to 5 years.
Tokenization of real-world assets refers to the transformation of traditional assets such as stocks, bonds, and real estate into digital tokens through blockchain technology, enabling these assets to be traded on the blockchain network. Since its rise, this concept has seen its popularity continue to rise and has already become one of the hottest narratives in the cryptocurrency field in 2024. Almost all types of tokenized assets have achieved significant growth over the past year. Among them, tokenized Treasury bonds have risen by as much as 179%, and private credit has soared by 40%. The overall market value of these assets increased by 32%, and the growth rate even surpassed that of the entire cryptocurrency market. Global investment giant VanEck predicts that by the end of this year, the RWA market size will exceed 50 billion US dollars.
Many Wall Street financial giants have also been increasing their investment in the tokenization field. Industry leaders such as jpmorgan Chase, UBS, BlackRock, Citigroup and Goldman Sachs have shifted from initial theoretical discussions on blockchain technology to comprehensive practical applications. Their proactive actions have fundamentally revolutionized the models of managing, trading, acquiring and using real-world assets in different industries and regions. Tokenized Treasury bonds alone experienced explosive growth in 2024. At the beginning of the year, their market value was only 769 million US dollars, but by September, it had surpassed the 2.2 billion US dollar mark.
At a time when traditional financial institutions are all making moves in the RWA field, a series of measures taken by HSBC Hong Kong are particularly eye-catching. As early as 2023, Mark Williamson, the global head of foreign exchange and Commodities partnerships and proposals at HSBC Holdings PLC, disclosed in an interview that the company had launched a platform that uses blockchain technology to tokenize the ownership of physical gold in London vaults. In the new system of HSBC, one token corresponds to 0.001 Troy ounce of gold. If local regulations permit in the future, the system is expected to be open to retail investors for direct investment in physical gold. HSBC Hong Kong’s prediction that the tokenization of RWA on public chains will surge this time might be based on its own experience in blockchain application practice and its insight into market trends.
The vigorous development of the RWA tokenization market is driven by many key factors. On the one hand, after years of development, blockchain technology has become increasingly mature, and early concerns about scalability and security have gradually dissipated. Take jpmorgan Chase’s blockchain platform Onyx as an example. As an enterprise-level technology, it has demonstrated the potential for large-scale application. Platforms such as Securitize also provide a solid infrastructure for the efficient and secure marking and trading of RWA. On the other hand, tokenization has lowered the investment threshold, allowing small investors to enter areas that were previously only open to institutional investors and injecting more liquidity into the market.
Nowadays, with HSBC Hong Kong’s optimistic outlook on the RWA tokenization market released, all market participants are waiting with anticipation. If the tokenization of RWA on public chains really surges as predicted by HSBC in the next 2 to 5 years, the entire financial market landscape could be rewritten. At that time, the boundaries between traditional finance and the cryptocurrency sector may further blur, and new investment opportunities and business models will also emerge accordingly.
Meanwhile, the cryptocurrency market remains in a complex and volatile state. Michael Saylor, co-founder of Strategy, hinted that he would increase the purchase of Bitcoin when the traditional financial market opened on Monday. The impact of his decision on the crypto market remains unknown. In the A-share market, stablecoin concept stocks have continued to rise, with Sifang Jingchuang hitting the daily limit up by 20CM, demonstrating the popularity of crypto-related concepts in the stock market. In terms of the monetary policy of the Federal Reserve, Paul Eitelman, an investment analyst at Russell, expects that the Federal Reserve may keep interest rates unchanged throughout the summer and there may be one or two rate cuts before the end of this year. Under the intertwined influence of the global economy and financial markets, the development trends in all fields deserve close attention from investors.
Related Topics:
- Arthur Hayes: If the Bank of Japan delays balance sheet reduction and restarts some quantitative easing in June, risky assets may rise sharply
- The chairperson of the US SEC: It is suggested to adopt a more open attitude towards self-custody of crypto assets
- Trump announced a newborn savings plan: save $1,000 for each child
