While the US dollar -backed stableecoin continues to dominate the conversation, recent discussions indicate with investors a growing focus on tokenization of real -world assets (RWAs), including stocks, bonds, bank deposits and real estate, Bank of America (BAC) said in a report on Monday.
According to BOFA, this shift marks the beginning of a multi-year journey towards full blockchain-based transactions.
The transformation will require significant infrastructure development, but promises a new era of 24/7 access across global jurisdictions, immediate settlement and improved liquidity, all supported by smart contracts that ensure compliance, the report said.
Tokenizing assets in the real world on a blockchain involves bringing traditional assets such as real estate, bonds and raw materials in the digital area. This process allows for fraction ownership, easier trade and increased accessibility of these assets.
A remarkable example of this development is the recent launch of a tokenized real estate platform by the Dubai Land Department (DLD), the bank’s analysts said.
This initiative aimed at digitizing up to $ 16 billion in real estate by 2033 will also introduce fractional ownership and expand access to a previous illiquit asset class, the analysts noted.
Bank of America said a recurring concern among investors has been the potential disruption of CITI’s (c) transaction services that account for about 40% of the bank’s bottom line as blockchain technology gets traction.
While the risk of disruption of traditional income streams, such as net interest income from deposits or fees, remains an option, there is a growing belief that investors can underestimate Citi’s expertise and adaptability in blockchain technology, BOFA said.
The pressure for tokenization signalizes a significant milestone in the adoption of blockchain technology for applications in the real world, the report added.
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