The market for crypto-backed tokenized assets could exceed $2 trillion within five years, as major institutions and regulators advance the infrastructure needed to integrate them into global finance, according to Ritesh Kakkad, Co-Founder of XDC Network.
"Stablecoins, which are pegged to real-world currencies, are the most mature tokenized asset type," Kakkad told Benzinga, noting the market's expected growth from $256 billion today to about $2 trillion in 2028.
He pointed to asset managers including BlackRock (NYSE:BLK), Bank of America (NYSE:BAC), and Coinbase (NASDAQ:COIN) developing tokenized equity and money-market funds.
BlackRock's BUILD Funds, for example, combine on-chain and traditional money market infrastructure.
Kakkad said enabling policy and better-defined regulations have been critical to this shift, citing the U.S., U.K., and Singapore as "front-runners in shaping crypto-friendly regulations."
He also noted that the EU's Markets in Crypto-Assets (MiCA) regulation in 2023 created "a positive environment and technological certainty" that attracted global investors.
In the U.S., the White House released a crypto policy roadmap on July 30, 2025, urging coordinated agency action to foster tokenization and blockchain-based innovation.
Tokenization divides high-value assets into smaller, tradeable tokens, enabling fractional ownership in real estate, private equity, and art.
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"The chain of ownership is transparent and is permanently logged on the ledger," Kakkad said. "That creates trust while at the same time facilitating peer-to-peer trading and global availability 24/7."
He outlined multiple advantages over traditional assets, including lower entry costs, higher liquidity, faster cross-border settlement, and auditability.
Programmability through smart contracts, he added, allows assets to be seamlessly integrated into financial protocols.
Institutional use cases are already expanding, with analysts forecasting digital assets appearing in repo markets, collateralized lending, and treasury operations "within the next couple of years."
Large-scale initiatives such as JP Morgan's (NYSE:JPM) Kinexys platform and Canton Network are live with tokenized bonds, gold, and gilts, involving partners like Goldman Sachs and Euroclear.
"Crypto-enabled tokenization rewrites eligibility for participation," Kakkad said. "Now people may invest online with only hundreds or just tens of dollars. That does level the playing field and democratizes all wealth."
He emphasized that the convergence of regulatory standards through bodies like IOSCO and the Financial Stability Board is laying the groundwork for cross-border interoperability, which will allow tokenized assets to move between countries, blockchains, and investor types with greater ease.
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