Centralization and the dark side of asset tokenization — MEXC exec

Tracy Jin, the chief operating officer at the MEXC crypto exchange, warns that tokenizing real-world assets (RWAs) carries a substantial amount of centralized risks that can lead to censorship, liquidity issues, legal uncertainty, cybersecurity problems, and asset confiscation through state or third-party intermediaries.

In an interview with Cointelegraph, the executive said that as long as tokenized assets remain under the purview of state regulators and centralized intermediaries, then "tokenization will simply be a new version of old financial infrastructure and not a financial revolution." Jin added:

“If the property or company behind the token is local, in a country with an unstable legal environment or high political volatility, the risk of confiscation increases,” the executive continued.

RWA tokenization is projected to become a multi-trillion sector in the next decade as the world’s assets come onchain, which will increase the velocity of money and extend the reach of capital markets worldwide.

The total market cap of the RWA sector. Source: RWA.XYZ

Related: Dubai Land Department begins real estate tokenization project

Tokenized real-world assets include stocks, bonds, real estate, intellectual property rights, energy, art, private credit, debt instruments, fiat currency, commodities, and collectibles.

According to RWA.XYZ, there are currently over $19.6 billion in tokenized real-world assets onchain, excluding the stablecoin sector, which surpassed a $200 billion market cap in December 2024.

A research report from Tren Finance polled large financial institutions, including Citi, Standard Chartered, and McKinsey & Company; the report found that the participants predicted the RWA market to reach anywhere between $4 trillion and $30 trillion by 2030.

Financial institutions provide different forecasts for the future of the tokenized RWA market. Source: Tren Finance

McKinsey & Company has projected that the RWA sector will reach between $2 trillion and $4 trillion by 2030 — a relatively conservative estimate compared to other forecasts.

Meanwhile, institutions like Standard Chartered and executives at the blockchain network Polygon say that the RWA market will reach $30 trillion in the next decade.

Magazine: Real-life yield farming: How tokenization is transforming lives in Africa