Asia is witnessing a 'Battle for Tokenization Market'
Asia is witnessing a 'Battle for Tokenization Market'
The race is on in Asia for the tokenization market, which is expected to reach $5 trillion by 2030.
The potential of the tokenization market has intensified the competition between Singapore and Hong Kong, which have long vied for the title of Asia's largest financial and technology hub.
According to Citigroup's latest forecast, the tokenization market will reach an impressive $5 trillion by 2030, spreading to assets such as bonds and real estate. However, Citigroup stressed that while mass adoption may still be six to eight years away, research indicates that the overall momentum of tokenization has shifted in a positive direction as governments, large institutions, and corporations have moved from researching the benefits of tokenization to testing and validating the concept.
A key benefit of tokenization, according to its proponents, is that the process greatly simplifies the trading of illiquid assets, expanding the pool of buyers and improving pricing.
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Anticipating the potential growth of tokenization, Singapore and Hong Kong have taken a number of important steps to tap into this high-potential market, according to Coincu.
Specifically, Hong Kong has updated its guidelines to allow retail investors to access tokenized funds and bonds. In addition, in February, the city sold the first HK$800 million in digital green bonds issued through Goldman Sachs' GS DAP platform. Hong Kong claimed to be the first in the world to issue tokenized green bonds.
Julia Leung, head of the Securities and Futures Commission of Hong Kong (SFC), also expressed the regulator's willingness to embrace new technologies to develop the crypto landscape.
"We welcome proposals that use innovative technologies to enhance efficiency and convenience for clients," Leung commented.
In response, Ravi Menon, head of Singapore's central bank, said the country is considering introducing a new consumer protection regime for cryptocurrencies, as well as creating an enabling regulatory environment for tokenization to take hold and expand.
Menon highlighted that Singapore's traditional financial institutions are experimenting with blockchain, using tokenized assets to reduce back-office costs as well as to better manage risk and facilitate capital market transactions.
While Singapore and Hong Kong have different approaches to cryptocurrency development, the battle for the tokenization market between the two has reached a new level, which is encouraging for blockchain technology proponents.
Read more: Coinbase unveils Onchain Payment Protocol.
