Real world asset simulator is the killer app of crypto – Polygon X
Colin Butler, Global Head of Institutional Capital at Polygon Labs, believes that real-world asset tokenization for institutional clients could be a killer application for cryptocurrencies because it significantly reduces costs and settlement times, making it difficult for traditional financial institutions to ignore.
“This technology is a major disruption to the global financial system,” said Butler – before describing the capital efficiency and business opportunities that all financial institutions are embracing the transition to tokenized assets.
Polygon's executive cost reduction benefits allow financial firms to consider new business models that were previously impossible due to highly competitive markets and thin margins.
A simple graphic depicting a real-world property token. Source: Chainlink
Butler cites the example of fund managers reporting surprisingly small profit margins for their management operations and benefiting from double-digit expense reductions. The executive told Cointelegraph:
“It's the best form of collateral for the global financial system – like all FX transactions, all options, stocks and bonds. That's why this could be fatal for the crypto category – it's a huge market that can be accessed by orders. More than anything else, claims to settle crypto .”
Butler emphasized that financial firms ranging from small financial institutions to global clearing houses will benefit dramatically from price reductions and settlement periods in securities such as bonds, U.S. Treasury bills and cryptocurrencies.
Related: Chainlink's Sergey Nazarov Predicts Asset Token Will Change Web3
The development of the tokenized real-world asset market
A Polygon executive previously told Cointelegraph that real-world assets represent a $30 trillion opportunity for investors when real-world assets come on-chain. According to Cointelegraph research, investment into tokenized US Treasury bills alone is predicted to exceed $3 billion by the end of 2024.
However, not everyone agrees with Butler's assessment that the real estate market will blossom to these levels. Real Vision's chief crypto analyst Jamie Coates believes the 2030 figure for real-world tokenized assets will be close to $1.3 trillion.
The analyst also noted that even at these conservative figures, the real-world property market still has a significant impact on digital property markets.
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