Key facts:

• RWAs are positioned on the border between the real world and the on-chain world.

• Financial giants like Franklin Templeton and BlackRock are involved in this industry.

A trend is increasingly resonating in the cryptocurrency industry: the tokenization of real world assets (RWA ) .

RWA refers to the tokenization or representation of real physical or financial assets in the form of tokens on a decentralized network, such as Ethereum, Solana or Polygon, among others.

The idea is to improve liquidity, transparency and efficiency in the transfer and management of these asset tokenization development . Thus, it seeks to allow greater financial inclusion and accessibility to markets that have traditionally been less accessible to the average investor.

Real-world assets can include real estate, works of art, vehicles, intellectual property rights, investments in private companies, commodities , financial contracts , among others.

By tokenizing these assets, they are fractionated into smaller units, allowing investors of all types and sizes to participate in markets that might otherwise be out of reach.

Additionally, decentralized cryptocurrency networks can offer an immutable and transparent record of the ownership and transfer of these tokens, potentially reducing fraud and improving trust in transactions.

1 – Dollar stablecoins dominate the RWA industry

Within the tokenized RWAs are stablecoins . These are, as defined by Cryptopedia (educational section of CriptoNoticias), tokens that maintain parity in their price with that of an underlying asset that may be a fiat currency.

Coingecko's report highlights that "currently, the majority of real-world tokenized assets are stablecoins pegged to the dollar."

“The top three dollar stablecoins alone make up 95% of the market, with Tether (USDT) at $9.1 billion [in market cap], USDC (USDC) at $26.8 billion, and Dai (DAI) at $4.9 billion. USDT holds a 71.4% market share and is still the dominant player in the space. Meanwhile, USDC, which saw its market share plummet after its brief decoupling during the US banking crisis in March 2023, has failed to recover.

Although there are stablecoins that follow the price of other underlying assets, they constitute

a minority. According to the report reviewed here, they barely reach 1% of the market.

They include other fiat currencies such as the euro, theyuan, the Mexican peso, and the Turkish lira.

2 – Gold is the most popular commodity in RWA

A basic good used in commerce that can be substituted for other goods of the same kind is called a commodity or raw material. Raw materials are categorized into areas like agriculture, energy, and minerals and are necessary for the production of other goods and services.

Common examples include oil, gold, wheat and coffee. Bitcoin has also been recognized as a commodity .

Commodities are frequently traded in specific markets, and their price is determined by the laws of supply and demand, being influenced by factors such as weather conditions, economic activities and global policies.

Within tokenized RWAs, commodities reach $1.1 billion in market capitalization and gold is the most popular.

CoinGecko details that “tokenized precious metals such as Tether Gold (XAUT) and PAX Gold (PAXG) make up 83% of the market capitalization of commodity-backed tokens. While Kinesis Gold (KAU) and VeraOne (VRO) are tethered to one gram of gold, tokens such as XAUT and PAXG are backed by one troy ounce of actual gold.

But there are not only tokens that represent gold but also other commodities. For example, CoinGecko explains that "the Uranium308 project has launched tokenized uranium that is pegged to the price of 1 pound of the uranium compound U308." Not everyone can trade this token but strict compliance protocols are required.

Commodity-backed RWAs represent only 0.8% of the market capitalization of fiat-backed stablecoins.

3 – Tokenized Treasuries are the fastest growing sector

The Coingecko report shows that tokenized treasury products have grown 641% in 2023 . Currently, its market capitalization exceeds $861 million.

Among these products, the tokens that represent US Treasury bonds stand out. (“typically referred to as "the safest investment in the world"). Despite their popularity and growth, these tokenized RWAs stagnated in 2024 and, in January, grew only 1.9%.

Three companies that stand out in tokenizing state treasury products are Franklin Templeton, Ondo Finance, and Mountain Protocol .The Mountain Protocol USD (USDM) is issued by the aforementioned company.). It is a token that works like a stablecoin, with the advantage that its holders periodically receive interest payments, as the underlying asset is United States Treasury bonds.

4-The majority of loans in the RWA sector are used to buy automobiles.

Finally, CoinGecko's report on the RWA tokenization industry demonstrates the automotive sector's leadership, particularly in terms of credit demand.

In any case, it is worth clarifying that this statement is striking if we take into account that the majority of decentralized lending platforms do not question their users about thow they intend to use the funds they have been given. CoinGecko does not detail how it reaches this conclusion.

If we take this data as true, loans whose purpose is to purchase cars reach 42% . Meanwhile, debts for the fintech and real estate sectors constitute only 19% and 9%, respectively.

Interestingly, most of these loans take place in the least banked regions of the world—Africa, Southeast Asia, Central America, and South America—according to CoinGecko.

RWA: an expanding industry with opportunities

RWA appears to be one of the cryptocurrency trends for the current year, as this report and other news from this information portal make clear.

This will also provide opportunities that can be taken advantage of by investors. It has already been seen, for example, how the Ondo Finance protocol token rose considerably in price days ago as a result of certain financial movements of the BlackRock company, linked to RWA.

In the coming months, with the “blessing” of the bull market, new developments and further expansion will likely be seen in this nascent market niche.