Bernstein analysts have identified the tokenization of real-world assets (RWAs) as a transformative trend that could reshape global finance, outlining how blockchain-based tokenized markets, though still early in development, are on track to become a multi-trillion dollar industry as infrastructure and regulatory clarity improve.

The report describes tokenization as "the next generation of market infrastructure," citing its potential to improve settlement processes, reduce counterparty risks, and broaden access to traditionally illiquid assets such as private credit and real estate.

Bernstein sees early evidence of this shift in pilot programs, where traditional financial institutions are exploring blockchain infrastructure for settlements, repo, and collateralization.

"Tokenization is not just about converting real world assets into tokens. It is about a better market infrastructure design — faster settlements, improved transparency, lower costs, and inclusion of a larger base of global investors," the analysts wrote.

The firm highlights the role of stablecoins and tokenized treasury bills as early product-market fits, offering the benefits of on-chain liquidity and efficiency while integrating with real-world financial systems.

"The adoption of blockchain-based infrastructure in the financial sector is no longer a theoretical concept — it's underway," the report states.

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While public blockchain infrastructure continues to evolve, Bernstein suggests that private-permissioned environments may lead to early institutional experiments.

Eventually, however, these use cases could migrate to more decentralized platforms as technology and compliance tools mature.

The report emphasizes the scale of the opportunity by noting the size of underlying traditional markets, including $8 trillion in private credit, $4 trillion in real estate, and trillions more in trade finance and other asset classes.

"The opportunity in RWA tokenization lies in solving the market infrastructure challenges," the report says, citing improvements in custody, compliance, and identity solutions as critical enablers.

The analysts also suggest that sovereign wealth funds, banks, and asset managers are showing increasing interest in this space, attracted by the combination of on-chain programmability and compliance.

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