The tokenization of real-world assets (RWA) is gaining momentum: Bank of America | CoinDesk JAPAN

• According to a report by Bank of America (BofA), the tokenization of real-world assets (RWA) is gaining momentum.
• BofA states that this is the beginning of a long journey towards the adoption of blockchain.
• The report notes that the new platform of the Dubai Land Department is expected to digitize real estate worth $16 billion by 2033, introducing fractional ownership and further advancing the tokenization of real estate.

Bank of America (BofA) stated in a report released on July 28 that while dollar-backed stablecoins remain at the center of discussions, recent conversations with investors have indicated a growing interest in the tokenization of real-world assets (RWA), including equities, bonds, bank deposits, and real estate.

According to BofA, this change suggests the beginning of a multi-year journey towards fully blockchain-based transactions.

According to the report, this transformation requires large-scale infrastructure development, but promises a new era of 24/7 access across jurisdictions worldwide, instant payments, and improved liquidity, all supported by smart contracts that ensure compliance.

Tokenization of real assets on the blockchain refers to the incorporation of traditional assets such as real estate, bonds, and commodities into the digital realm. This process enables fractional ownership of these assets, simplifies transactions, and enhances accessibility.

A notable example of this evolution is the recent launch of a tokenized real estate platform by the Dubai Land Department, according to BofA analysts.

This initiative aims to digitize real estate worth up to $16 billion (approximately ¥2.37 trillion, based on an exchange rate of 148 yen to the dollar) by 2033, and analysts noted that by introducing fractional ownership, it will broaden access to an asset class that has previously had low liquidity.

According to BofA, a recurring concern among investors is the potential disruption to banking transaction services as blockchain technology becomes more widespread. While the risk of disruption to traditional revenue sources such as net interest income from deposits and fees still remains, there is a growing perspective that investors may be underestimating banks' expertise and adaptability in blockchain technology, BofA stated.

The movement to promote tokenization indicates an important milestone in the introduction of blockchain technology into real-world applications, the report adds.