On January 16, the Tokenized Asset Coalition (TAC), which includes Aave, Circle, Coinbase, and Centrifuge, published its annual report outlining the state of RWA today. The editors of Blockworks write about the details.
Stablecoin Stability and USDT monopoly
The paper highlights that when compared to blockchain and venture activity in the crypto space, stablecoin issuers Circle (USDC) and Tether (USDT) remained the most resilient in the bear market.
The stablecoin market currently stands at $133 billion. USDT dominates this segment with a total share of 70%, according to DefiLlama. USDC, meanwhile, is at 18%, and Dai ( DAI ) is at about 4%.
Future Potential of Stablecoins Tied to the Euro and Other Major Currencies
Meanwhile, tokens pegged to other currencies have not yet gained significant adoption. Thus, the capitalization of stablecoins that are backed by the euro is only $600 million. Demand from retail investors for such assets is very weak. However, they attract institutional players – for example, Societe Generale, DWS, and Galaxy Digital. The listed companies have already launched their own stablecoins pegged to the euro exchange rate.
The report’s authors predict that 2024 will be a turning point in the adoption of stablecoins based on the euro and other national currencies.
Tokenization of Treasuries
A huge tokenization effort in 2023 was also aimed at US Treasuries. However, this area is still in its infancy. According to Centrifuge CEO Lucas Vogelsang, tokenized treasuries were not previously in demand for two main reasons:
- Interest rates were close to zero, so investors were not interested;
- The decentralized finance (DeFi) industry is not mature enough, but it is already starting to show more sustainable development.
According to rwa.xyz, Analytics on Tokenized Assets, there are currently more than 20 firms offering tokenized products related to the US Treasury. Their total amount is estimated at $861 million.
“Now that rates are stagnant, people are less motivated to invest elsewhere because they’re getting high returns on what are essentially risk-free investments,” Vogelsang said. He added that if interest rates fall, investors will again begin to explore alternative asset classes.
Previously, 21.co analysts predicted that by 2023, the market for tokenized assets would grow to $10 trillion. Experts have concluded that the dynamics of convergence between cryptocurrencies and traditional finance are now showing unprecedented growth.
