What are the advantages of real-world asset (RWA) tokenization | CoinDesk JAPAN

At a time when the prices of many crypto assets (virtual currencies) are rising, a recent major move is being underestimated: the tokenization of real-world assets (RWAs).

To understand what this move means and the benefits of tokenizing real-world assets (RWAs), we need to rethink how we view the digital asset ecosystem.

We often ask questions like, "What is the price of Ethereum?", "How well do digital assets correlate with other asset classes?" and "What allocation should I make to this asset class in my diversified portfolio?"

While these questions are interesting, they all relate to digital assets as an asset class.

Foundations of Financial Services

Another way to look at this area is to view the various networks (e.g., Bitcoin, Ethereum, Solana) as digital infrastructure.

Just as TCP/IP and POP3/SMTP are protocols for building and commercializing services, the digital asset network is the foundation for deploying and making financial services (and other services) available.

Tokenization of assets is one such example; a simple definition of the term is the use of a decentralized network and its component databases to record transactions between parties.

stable coin

The most obvious example seen in recent years is stablecoin, which is primarily a tokenized U.S. dollar; stablecoins come in a variety of forms, but generally take U.S. dollars and issue tokens against them (e.g., USDC, USDT); the market capitalization of U.S. dollar-linked stablecoins is currently about $150 billion; five years ago it was almost zero.

Now that the stable coin market is gaining popularity, the following question comes to mind.

If we can issue tokens in U.S. dollars, why can't we issue other currencies and assets on-chain?"
This is the core of RWA tokenization.

Tokenized U.S. Treasury Bonds

And a case in point is the tokenization of U.S. Treasuries, which are now worth about $750 million and were virtually non-existent just two years ago.

Tokenized U.S. Treasuries have an advantage that stabled coins do not: they generate yield.

In addition, tokenized assets can offer 24/7 trading, shorter settlement times (T+0), and greater accessibility; for example, they can be used by anyone with a smartphone.

Tokenized gold (gold) and various other examples show that digital asset networks are being used as infrastructure for the distribution of financial services.

From this perspective, we may not measure the success of a network by the price of its native crypto assets, but by other value-added services distributed using its digital asset infrastructure.

The ideal outcome from the use of this technology is a faster, cheaper, more transparent, and accessible financial system for all."