Institutions To Tokenize $25B in Off-chain Assets in 2023, VanEck Execs Predict

The fund manager’s head of digital assets research says bitcoin could hit a low of $10,000 and a high of $30,000 in 2023.

Executives at fund manager VanEck are bullish on security tokenization accelerating in 2023 and believe sovereign institutions could be a main driver of a projected bitcoin price increase in the second half of next year.

The projected momentum around the use of blockchain technology is set to guide the firm to focus on crypto-native products going forward, they added.   

Stay in the know on crypto by frequently visiting Crypto News Today

The New York-based investment group expects financial institutions to tokenize more than $25 billion in off-chain assets onto blockchains next year, Matthew Sigel, VanEck’s head of digital assets research, said in a webinar Wednesday. 

Such companies are likely to employ blockchains to simplify custody and settlement while reducing costs for customers, he added.

VanEck’s prediction comes as a number of institutions have expressed interest in the tokenization space over the past year, often distinguishing the use case of blockchain technology from the broader, volatile crypto space.

The central bank of Singapore revealed in May it had teamed up with JPMorgan Chase for a blockchain pilot exploring the potential of DeFi. Called Project Guardian, the initiative sought to tokenize bonds and deposits, with smart contracts powering trade executions. 

Nicole Olson, a senior vice president of digital product development at State Street, told Blockworks in an August interview that using distributed ledger technology to tokenize funds and private assets to improve efficiency and accessibility is something the company is working on for 2023.

Stay in the know on crypto by frequently visiting Crypto News Today

Executives at Fund group WisdomTree, which manages $76 billion in assets, has repeated its focus in recent months to bring fixed income, equities and commodities into the digital world through blockchain-enabled funds and tokenized exposures.

More recently, Larry Fink, CEO of BlackRock — the world’s largest asset manager — said at the New York Times DealBook Summit last week that “the next generation for markets and next generation for securities will be tokenization of securities.”