The Open Source blockchain of Iota is trying to carve out space within the “Real World Asset” (RWA) industry by integrating its compatible ShimmerEVM network with the crypto custody service provider Fireblocks.
The move comes after numerous tests and two months after the first smart contract was released on ShimmerEVM, which serves as the staging infrastructure for Iota.
The market for asset tokenization such as stocks, bonds, and treasuries is becoming increasingly attractive to investors and private companies, with various asset managers like VanEck and 21.co predicting a bright future for this niche.
Already today this sector is worth 342 billion dollars but we are talking about multi-billion dollar valuations by 20230.
Let’s see everything in detail below.
Summary
Iota wants to expand in the RWA sector and chooses Fireblocks as a partner for the custody of crypto on ShimmerEVM
Iota is exploring various possibilities to expand its offering in the “Real World Asset” (RWA) sector and has integrated its ShimmerEVM-compatible network with the crypto custody solutions provider Fireblocks.
The term RWA refers to the transfer onto the blockchain of a material or immaterial asset belonging to the traditional financial world, such as bonds, stocks, commodities, and real estate.
This practice offers a series of advantages such as increased liquidity in the markets, greater accessibility to a wide audience, reduced intermediation costs, and impeccable transparency of operations.
Shimmer is an EVM-compatible blockchain that serves as an infrastructure for testing new applications and offers the possibility to develop smart contracts in environments like Iota’s where executing the function natively is not possible.
The partnership with Fireblocks, as highlighted by Iota co-founder Dominik Schiener, will help its crypto ecosystem emerge in such a competitive RWA market, being able to rely on one of the most secure and widely adopted custody services that support asset tokenization.
We remind you that the latter provides services to over 1,800 clients, including prominent financial institutions such as BNY Mellon and BNP Paribas.
In detail, the integration will allow all customers of the custodian to hold crypto assets on the ShimmerEVM network and initiate transactions directly from the Fireblocks console and API, without having to interface with additional infrastructures.
This allows for an improvement in Iota’s offering in the tokenization of real resources with a focus on security and the simplicity of such processes.
This is a huge step forward for Iota, considering that just 2 months ago the first smart contract (ISC) was released on the open source network thanks to the support of Shimmer developers.
The road to mainstream adoption of RWA for Iota and its crypto ecosystem is still very long Ethereum remains the dominant solution in the vast blockchain world, even for this niche sector.
Consider that for what concerns only the market of tokenization of “Treasury Products”, which is currently worth 770 million dollars (growing by 700% since January), Ethereum alone manages over half of these assets.
Source: rwa.xyz
Anyway, Iota is growing organically: in November its DLT foundation landed in the Middle East where it was registered and approved by the United Arab Emirates, with the aim of promoting accelerated growth of innovative technologies and tokenized assets.
All these initiatives are positioning Iota on the right track to improve and expand its services and achieve a well-deserved place among the top RWA solution providers
Expanding market for the tokenization of real assets
Iota’s efforts and its entire crypto ecosystem are motivated by the strong and growing market for the tokenization of real assets.
Its co-founder, Schiener, has reiterated the group’s commitment to building an infrastructure that can address the increasing demand for resource tokenization worldwide.
These are his words in a recent interview:
“We can expect many large institutional investors and financial institutions to publicly support digital assets by 2024. With clear regulations and renewed public support through these institutions and upcoming ETFs, we are on track to make institutional investors the dominant market participants.”
It’s not just Iota who thinks that this is a rapidly expanding sector: even the famous asset manager VanEck has highlighted through its research apparatus how, despite the complex situation of the cryptocurrency market at the beginning of 2023, the RWA niche.
According to a September survey, the entire industry is already worth more than 342 billion dollars, but there are additional capital inflows expected in the coming years.
The digital asset manager 21.co is also bullish on the tokenization of bonds, stocks, commodities, and treasury: its forecasts indicate that the market could reach a record valuation of 10 billion dollars (approximately 29 times the current values) by 2030 in the event of a particularly bullish phase.
Even in the worst case scenario, however, expectations are very high with a forecast of at least 3.5 billion dollars (10x the current values).
This sentiment is motivated by the growing fame for TradFi itself, which combines disruptive technologies and financially recognized assets in a single environment globally.
Among the other institutions that see a bright future for this cryptographic industry, we find Bank of America, which in the past has stated how tokenization can disrupt the current existing financial infrastructure, given the advantages in terms of costs and capital efficiency.
Finally, even the US multinational strategic consulting firm Boston Consulting Group strongly believes in this narrative.
His forecasts go for a valuation of 16 billion dollars already for next year (x 46 from current values).
