Mercado Bitcoin, a major crypto exchange in the Latin America region, announced on Friday that it is tokenizing $200 million in real-world assets (RWAs) on the XRP Ledger (XRPL).
The real-world assets include tokenized fixed-income and equity financial instruments, according to an announcement from Ripple, the blockchain company that launched the XRPL.
A report published by Boston Consulting Group and the blockchain company forecasted the tokenized RWA market to swell to a $19 trillion market capitalization by 2033.
The deal came amid a concerted effort from the crypto industry and asset managers to create regulatory clarity for tokenized equities and other RWAs in the United States, as companies expand their tokenized offerings and integrate tokenized asset trading into existing platforms.
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Crypto firms rush in to tokenize traditional financial assets, but regulations are still unclear
Ondo Finance, a decentralized finance (DeFi) protocol, acquired tokenized asset firm Oasis Pro on Friday in a bid to expand its presence in the emerging RWA sector.
“Oasis Pro was one of the first US-regulated alternative trading systems authorized to support the settlement of digital securities in both fiat and stablecoins,” Ondo Finance wrote.
Centrifuge, a blockchain firm focused on integrating RWAs into DeFi protocols, announced plans on Tuesday to tokenize the S&P 500 stock market index, a weighted collection of the 500 biggest publicly-listed companies in the US stock market.
In January, Larry Fink, the CEO of BlackRock, the world’s largest wealth manager with approximately $11.4 trillion in assets under management, urged the United States Securities and Exchange Commission (SEC) to approve stock and bond tokenization.
John Murillo, chief business officer of fintech company B2BROKER, said that tokenized equity instruments are still in a regulatory grey zone and lack many of the rights granted to holders of traditional equities.
“There is no direct claim on company assets, no voting rights, and no access to internal financial information,” the executive wrote in an email sent to Cointelegraph.
Investors must understand the fine print of every individual tokenized RWA instrument they are eyeing to understand if there are any cash flows, dividends, legal stipulations, or smart contract risks in any prospective investment, the executive added.
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Cointelegraph by Vince Quill