Crypto’s killer use-case: Tokenization of RWAs (Global stock markets)

In recent years, the cryptocurrency industry has witnessed the emergence of various narratives, each purporting to revolutionise the industry and pave the way for its mass adoption. From the advent of NFTs to advancements in artificial intelligence, these trends have amassed widespread and often frenzied attention from retail investors and institutions alike.

Now, in 2023, it is increasingly clear that the tokenization of real-world assets (RWAs) will take centre stage as the latest narrative looking to transform the industry. While the potential of tokenization is vast, the biggest opportunity lies in the tokenization of global stock markets, specifically the trading of public stocks on the blockchain. At StrikeX, we believe this particular niche has the potential to completely transform traditional financial markets and change the way the world trades forever… here’s why.

The market size of tokenized public stocks is colossal. According to the World Federation of Exchanges, the global stock market was valued at $122 trillion as of April 2023. This figure represents the potential total market size of tokenized public stocks. Whilst this new technology has a long way to go before we see the entire global market tokenized and traded on-chain, institutions such as Citi group and BlackRock are predicting a more immediate 80-fold explosion in the tokenization market over the next seven years, with up to 10% of global GDP being tokenized in the same timeframe.

The tokenization of global stock markets has the potential to revolutionise the traditional market, which often suffers from legacy issues and urgently requires future-proofing. Tokenization provides numerous benefits, including increased liquidity, fractional ownership, faster transaction speeds, cost savings, improved transparency, greater inclusion, and a wider variety of assets. These advantages can transform the entire industry, making it more accessible and efficient for investors and stakeholders. Moreover, tokenized public stocks can offer innovative features like programmable dividends, voting rights, and governance mechanisms. This allows for greater flexibility and customisation of financial instruments, catering to the unique needs of investors. In short, the potential benefits of tokenization have the power to reshape the stock market and create a more equitable, transparent, and inclusive financial system.

As interest in the tokenization of RWAs continues to increase, it is essential to grasp the terminology and nuances of this technology. Understanding the difference between synthetic and tokenized RWAs, as well as the critical role of collateralisation, is vital in assessing the benefits and risks of tokenizing RWAs. For more information on this subject, please refer to our recent article “Not All Tokens Are Created Equal”.

At StrikeX, we have long since realised the enormous impact that the tokenization of global stock markets will have in the years to come. For over two years, we have been diligently working to establish an ecosystem that can fully deliver the potential of tokenization. From spearheading self-custody solutions to making progress in tokenization advancements, we are well-prepared to benefit from this revolutionary new narrative. To learn more about how we are building towards a token economy here at StrikeX, please read our article titled “The RWA Revolution is here”.

The transformative potential of global stock market tokenization is simply too immense to disregard. With numerous governments and institutions already exploring this concept, it is undoubtedly poised to become cryptocurrency’s ‘killer use case’. Its unique benefits, innovative features, and potential market size far surpass many other emerging crypto narratives. At StrikeX, we are fully prepared to lead the charge in this revolution. We urge you to familiarise yourself with this subject and join us as we take centre stage in the RWA revolution.