US-based investment bank TD Cowen predicts that on-chain assets could reach $100 trillion within the next five years. The bank stated that tokenization, the representation of traditional financial assets on blockchain, will spread rapidly and that major financial institutions are beginning to agree on common standards.
Critical Report from TD Cowen
According to the bank's report, on-chain capital has reached $4.6 trillion since 2020. However, with political and regulatory developments progressing faster than expected, this figure is expected to surpass $100 trillion by 2030. In a note after returning from the Digital Asset Summit in London, TD Cowen analysts emphasized that the appeal of tokenization stems from its tangible benefits: lower costs for cross-border transfers, faster settlement, and programmable finance that can be directly integrated with capital markets.
The report is based on interviews with executives from institutions such as JPMorgan, Bank of America, Euroclear, and Tradeweb. Analysts have noted that staked assets, particularly on Ethereum, play a significant role in on-chain capital formation as a return engine.
Tokenization refers to the representation of traditional assets such as bank deposits, money market funds, government bonds, stocks, or real estate on the blockchain. This allows these assets to be traded 24/7, reconciled in seconds, and compatible with smart contracts.
TD Cowen says that activity in this area is no longer limited to demonstrations but is manifesting directly in pilot projects. BNY Mellon is working on tokenized deposits to modernize payments. BlackRock is evaluating plans to tokenize its real-world asset (RWA) funds on the blockchain.
Policy trends are also favoring tokenization. The UK is preparing to appoint a "digital markets champion" to coordinate tokenization processes in wholesale markets. Major banks in the US and Europe are working to develop a joint stablecoin product. Such an initiative could create an on-chain "cash pillar" that would work alongside banks' deposit tokens. Investor interest is also growing. According to a State Street survey, most institutional investors plan to double their digital asset positions over the next three years. More than half of respondents expect 10 to 24 percent of their portfolios to be tokenized by 2030. Robinhood's CEO similarly predicts that most major financial markets will have a tokenization framework by 2030.
"While the road remains bumpy, political and regulatory progress has been much faster than we anticipated two years ago," TD Cowen analysts said. "We believe on-chain capital formation could reach $100 trillion or more in the next five years; this trend is too large to ignore."
The bank says that once major institutions agree on common protocols, tokenization will move from the pilot phase to mass adoption.
