RWA Market, which has grown 4.1 instances in two yearsn3rd quarter of this 12 months, ‘storm progress’n Wall Road and Hong Kong compete for preoccupation with ‘nationwide bond tokensn Tokenization MMF progress comparable to BlackRock ‘BUIDL’n Capitalization “Okay-national bond token roadmap urgently wanted”n Korea delayed for second 12 months of token securities (STO) laws
![The size of the RWA (real asset) token market (excluding stablecoins) surged 4.1 times from $7.87 billion in the third quarter of 2023 to $32.27 billion in the third quarter of this year. In particular, tokenization of traditional assets such as bonds and stocks is leading the rapid growth. [Data = Capital Market Research Institute]](https://wimg.mk.co.kr/news/cms/202511/12/news-p.v1.20251111.bebca7ffd47f49b693d7f304dcbbe032_P1.png)
The “Tokenization” revolution, which will change the landscape of the financial system, is spreading past Wall Road to a contest for management at the stage of governments.
Particularly, even “nationwide bonds,” the foundation of the financial system, have been tokenized, sparking competitors for next-generation financial infrastructure that permits 24-hour transactions and “zero-second funds,” however South Korea is being neglected of the “token finance” development attributable to delays in even processing associated payments.
Kim Pil-kyu, a senior researcher, and Chung Hwa-young, head of the Bond Analysis Heart, launched a report on “Tokenization of Authorities Bond in the Age of Digital Transformation” at the fifth KCMI Concern Briefing held by the Korea Capital Market Institute (KCMI) on the twelfth.
Tokenization digitally data belongings primarily based on distributed ledger know-how (DLT), implementing automated transactions and “atomic funds” (simultaneous implementation of asset switch and fee).
![Director Kim Se-wan is giving an opening speech at the 5th KCMI Issue Briefing held by the Korea Capital Market Institute (KCMI) on the 12th. [Picture = Reporter Ahn Gap-sung]](https://wimg.mk.co.kr/news/cms/202511/12/news-p.v1.20251112.0651b16c7b3047969595c7ea407483b3_P1.jpg)
The market is already exploding. In line with senior researcher Kim and middle director Chung, the measurement of the world tokenization market, excluding stablecoins, jumped 4.1 instances in simply two years from $7.87 billion in the third quarter of 2023 to $32.27 billion (about 42 trillion received) in the third quarter of this 12 months. Particularly, this progress is led by conventional financial belongings comparable to bonds (13.6 instances) and shares (351.9 instances).
Till now, the digital asset market has been centered on cryptographic belongings with weak hyperlinks to the actual economic system, however RWA tokenization is now a robust bridge between conventional financial markets and digital markets.
◆ Nations Preoccupying ‘Financial Skeleton’ Authorities Bond…US “non-public MMF” vs Hong Kong “authorities issued”
![Hong Kong became the first country in the world to issue green government bond tokens in 2023 and succeeded in issuing "Native" in four currencies last year. Governments of each country are seeking to secure the next generation of financial leadership, with Slovenia listing for the first time in the European Union (EU) and Luxembourg listing on the stock exchange. [Data = Capital Market Research Institute]](https://wimg.mk.co.kr/news/cms/202511/12/news-p.v1.20251111.d50d5a16778045ccaca2c0182870ff44_P1.png)
At the coronary heart of this enormous movement is a ‘nationwide bond token’. Authorities bonds are a reference level for risk-free rates of interest and a key collateral asset in the financial system.
The BIS (Financial institution for Worldwide Settlements) recognized authorities bond tokens as the “fundamentals of the tokenized financial system” together with wholesale CBDC (wCBDC) and deposit tokens.
Tokenization maximizes the collateral operate of authorities bonds. It dramatically will increase funding effectivity by enabling automated collateral administration, rapid fee switch, and “intraday repo transactions” that have been beforehand unattainable.
Nations are combating for pace to preempt this ‘future framework’, and there are two predominant methods.
The first is ‘direct issuance’ led by Hong Kong and Europe. It is a super approach for the authorities to problem authorities bonds instantly in token type.
Hong Kong succeeded in issuing inexperienced authorities bond tokens in 2023 and 2024, and is in search of to develop into an Asian digital asset hub by pushing for a “common issuance” in any respect. Europe is additionally supporting bond token issuance tasks linked to wCBDC led by the ECB and SNB (Swiss Central Financial institution).
The second is the “oblique technique” led by the U.S. non-public sector. As an alternative of the authorities, the U.S. is specializing in tokenizing MMF, which is invested in short-term authorities bonds by asset managers comparable to BlackRock and Franklin Templeton.
Particularly, the impression of the US MMF tokenization is larger than anticipated. The key is ‘innovation of utilization’. Current MMFs have been solely used for funding or fund administration, however tokenized MMFs (BUIDL, BENJI, and many others.) started for use as “secured securities” that weren’t attainable earlier than in addition to rapid fee.
In October 2023, the first transaction in which MMF tokens have been used as collateral for derivatives transactions was accomplished, and Goldman Sachs and BNY Mellon are additionally launching associated options, emphasizing the collateral potential of tokenized MMF. This reveals that authorities bonds are not directly supporting the progress of the tokenization market.
■ South Korea, STO invoice drift…Bungled by ‘funding in actual property’
![The U.S. is leading the market in an "indirect way" in which private asset managers such as BUIDL tokenize government bonds MMF instead of issuing them directly by the government. The size of U.S. government bond-based token products has been increasing steeply since 2024. [Data = Capital Market Research Institute]](https://wimg.mk.co.kr/news/cms/202511/12/news-p.v1.20251111.ced724e033ce420baf1c78fad7590fc0_P1.png)
The drawback is Korea. Korea is not correctly responding to the world tokenization development.
Though the authorities introduced a system for issuing and distributing token securities (STO) in early 2023, associated laws has not exceeded the threshold of the Nationwide Meeting. Consequently, the home market stays at the stage of ‘actual property fragmentation funding’ by means of regulatory sandboxes.
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![Chung Hwa-young, director of the Bond Research Center, who was a presenter at the 5th KCMI Issue Briefing held by the Korea Capital Market Institute (KCMI) on the 12th, explains the importance of "token currency government bonds." [Picture = Reporter Ahn Gap-sung]](https://wimg.mk.co.kr/news/cms/202511/12/news-p.v1.20251112.a77218c7d1b7407186bbcc9d747326e6_P1.jpg)
Kim Pil-kyu, a senior researcher at the Korea Capital Market Analysis Institute, mentioned, “We have to set the route of the introduction of the tokenization system and give you a plan to create a digital asset ecosystem. We have to separate speculative crypto belongings and RWA-based digital belongings to organize a regulatory system and put together a phased roadmap for issuing ‘Okay-Authorities Bond Tokens’.”
As world financial corporations are making each effort to change know-how, comparable to JPMorgan offering digital options by means of its personal blockchain platform, home financial establishments are additionally declaring that they need to hurry to develop DLT-based services and products to keep away from falling competitiveness.
Beginning with authorities bonds, tokenization of all useful belongings, together with shares, actual property, gold, and different actual belongings, is anticipated to proceed sequentially, mentioned Kim Se-wan, head of the Korea Capital Market Analysis Institute. “We hope that the publication of a report on the ‘tokenization economic system’ that will convey a few revolutionary change in all financial transactions will function a possibility to revitalize the home digital economic system.”
