Bank of America: Tokenization of real-world assets is on the rise

According to CoinDesk, Bank of America (BAC) stated in a report on Monday that while dollar-backed stablecoins continue to dominate, recent discussions with investors indicate a growing interest in tokenizing real-world assets (RWAs), including stocks, bonds, bank deposits, and real estate. This shift marks the beginning of the bank's multi-year journey toward fully blockchain-based transactions. The report states that this transformation requires significant infrastructure development but promises to usher in a new era of 24/7 access across global jurisdictions, instant settlement, and enhanced liquidity, all underpinned by regulatory-compliant smart contracts. The report specifically mentions the Dubai Land Department's (DLD) recently launched real estate tokenization platform, which aims to digitize $16 billion worth of real estate assets by 2033 and increase accessibility to these illiquid assets through fractional ownership. Analysts believe that as blockchain technology becomes more widespread, traditional banking businesses such as Citi's trading services (which account for 40% of profits) may face disruption, but the market may be underestimating its ability to adapt to the technology. The report adds that the push for tokenization marks a significant milestone in the real-world application of blockchain technology.