Deloitte Report: Tokenisation Could Unlock Trillions of Dollars in Value

Deloitte Report: Tokenisation Could Unlock Trillions of Dollars in Value
  • Tokenised financial assets represent a trillion-dollar opportunity in the next decade, according to a new Deloitte report.
  • Risks to realising tokenisation’s commercial benefits include a range of collaborative, technical, regulatory and risk management challenges.

Tokenisation of assets via the blockchain is being pioneered in the financial services sector—with big names like BlackRock’s Larry Fink heralding its revolutionary impact

And now, one of the ‘big four’ consultancies—Deloitte—has echoed his sentiments in a recent report that predicts tokenisation of financial assets could be worth trillions in this decade and “usher in a new era for the financial services industry.”

Deloitte points to the fact this could be a drop in the ocean compared to the potential wider market for tokenisation of assets across sectors including real estate, private equity, venture capital funds, exchange-traded products and more. 

Lifecycle of tokenised asset, Source: Deloitte.

Related: Aussie Chainlink Exec Says Banks Are Preparing for Tokenisation

Report Explores Commercial Benefits And Risks Of Tokenisation

Deloitte posits the following use cases present the best chance of providing real value for early adopter financial institutions in coming years:

  • Issuing bonds as tokenised assets to improve liquidity and accessibility.
  • Facilitating intraday repo transactions via distributed ledger.
  • Tokenising stock and bond ETFs for faster settlement times and broader access.
  • Representing ownership of physical gold and other commodities through tokens.

Related: HBAR Crashes After Surge Sparked by BlackRock Tokenisation Rumours

The report highlights the challenges and unintended consequences of what Deloitte describes as “increasing the velocity of money”, which could include:

  • More rapid onset of financial crises 
  • Faster execution of financial fraud 
  • Smaller windows of opportunity to make monetary policy decisions.

With the path yet to be defined, organizations will likely need to work through complex and diverse challenges including interoperability and secondary markets, regulation and risk management, privacy, legacy systems, and tax and accounting.

Deloitte

Risk introduced with tokensation. Image source: Deloitte.

Creating “vibrant secondary markets” that bring together multiple financial service providers and customers to buy and sell tokens is a particular priority for maximising the trillion-dollar potential of tokenisation, according to Deloitte. Currently, most tokens can’t be traded outside the systems used by the issuing entity. 

And only with the creation of appropriate application programming interfaces (APIs) and common technical standards can institutions break out of their silos and secure connections among all interested parties and participants.

Deloitte

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