Cynthia Wu, co-founder of the digital asset service platform Matrixport, thinks that almost every “real world” asset class will be tokenized as a nonfungible token in the next five to ten years (NFT).
Wu informed in an interview that the best case for NFTs would be for them to be widely used to represent real-world assets that could be stored and traded on-chain.
The authors said that NFTs could be our way to represent off-chain assets like real estate deeds, stocks, or bonds.
Wu says that putting these assets on the blockchain will make them “more liquid and more tradeable,” which will make it easier to find prices and do business.
Even though it’s great that Bitcoin (BTC), Ether (ETH), and other tokens have helped us create more than $2 trillion in digital native assets on-chain, Wu said that the only market segment where NFT transaction activity has been created is in digital collectibles, which hasn’t helped institutional adoption.
Even though “the first 3–5%” may be in place now, “we haven’t really seen off-chain assets being represented on-chain.”
Still, Wu is hopeful that things will get better in the long run.
In a report that came out earlier this month, Boston Consulting Group (BCG) said that the total value of tokenized illiquid assets could reach $16.1 trillion by 2030.
BCG thought that a big part of this tokenization would be made up of pre-IPO stocks, real estate, private debt, and income from small and medium-sized businesses.
Financial institutions are interested in tokenizing real-world assets, but Wu says that some of them don’t want to give up the old systems that have worked well for them.
Tokenization on the blockchain makes it possible to trade nonfungible assets, which haven’t been taken into account by the traditional financial system because they can’t be easily traded like fungible or divisible assets can.
She also said that blockchain infrastructure is better than current systems because it has the potential to make the financial sector more efficient by cutting costs, increasing liquidity, giving people access to markets around the clock, and getting rid of middlemen.
Matrixport is a digital asset management company that has been open since February of this year. It manages between $3 billion and $4 billion in digital assets for a wide range of individual and institutional investors.
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