During a panel at ETHConf, Carlos Domingo, CEO of Securitize, highlighted the potential of tokenized stocks and exchange-traded funds (ETFs) to significantly expand the real-world asset (RWA) market from its current size of about $30 billion to as much as $5 trillion. He emphasized that even a modest portion of the $150 trillion global equities market transitioning to on-chain formats could lead to substantial growth.

Key Insights:

  • Domingo suggested that tokenized equities and ETFs, rather than private credit or Treasury products, will be pivotal in driving the RWA market's expansion into trillions.
  • He noted that public blockchains, especially Ethereum, are ideally suited for institutional tokenization. Domingo criticized many current tokenized stock offerings, stating they often function as synthetic products lacking true ownership, voting rights, and dividends for investors.

At the ETHConf discussion in New York, Domingo asserted that the integration of stocks and ETFs into blockchain technology could reveal a much larger market than the existing tokenized asset landscape.

He remarked, "The total global equities and ETF market is estimated at around $150 trillion. If just 2% or 3% of that shifts on-chain, we could approach the $5 trillion mark."

These remarks coincide with Securitize's preparations to go public and its ambition to become a leading tokenization service for institutions, including BlackRock.

While tokenized U.S. Treasuries have dominated the RWA sector recently, Domingo believes that tokenized stocks will emerge as the next significant growth driver. Securitize has formed partnerships with the New York Stock Exchange and Computershare to facilitate on-chain trading and settlement of equities.

Domingo differentiated what he considers "genuine" tokenized equities from the increasing number of blockchain-based stock products available outside the U.S.

He stated, "Many entities claiming to tokenize equities are not actually doing so; they often rely on derivatives or synthetic structures rather than providing direct ownership of the underlying shares."

Domingo envisions that blockchain-enabled securities will eventually grant investors the same rights as traditional shares while benefiting from advantages like immediate settlement, 24/7 transferability, and enhanced integration with decentralized finance.

Despite concerns regarding transparency and compliance, Domingo maintained that public blockchains, particularly Ethereum, are the preferred frameworks for institutional tokenization. Securitize employs smart contracts to ensure ownership is limited to verified investors while enabling assets to operate on permissionless networks.

Looking forward, Domingo anticipates that blockchain markets will evolve alongside existing financial systems before gradually capturing a more substantial share of market activity. "Traditional markets will persist," he explained. "We will witness the emergence of a new market that operates on blockchain technology and is significantly more efficient."

Read more: BlackRock-backed tokenization firm Securitize clears key hurdle to go public on NYSE