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CoinDesk 2025-02-03 20:50:52

Real-World Asset Tokens Lead Crypto Rebound as Tokenization Narrative Gathers Steam

Cryptocurrencies in the real-world asset (RWA) sector led the recovery of the broader digital asset market from the overnight bloodbath, underscoring the strength of the tokenization investment narrative. Decentralized finance (DeFi) tokenized asset platform Ondo Finance's governance token was 16% higher on the day, surging almost 40% from the overnight lows. The protocol today unveiled Ondo Nexus, an instant minting and redemption service for tokenized Treasury issuers. The company behind the protocol is holding a summit in New York later this week with several traditional finance heavyweights including BlackRock, Franklin Templeton participating. The native token of MANTRA (OM), layer-1 blockchain designed for tokenized assets focusing on the Middle East market, rebounded 30% from Monday's bottom and was up 16% on the day. The network last month announced a billion-dollar asset tokenization partnership with Dubai property conglomerate DAMAC Group encompassing real estate and data center investments. The native token of Chintai (CHEX), a tokenization platform regulated and licensed by the Monetary Authority of Singapore, advanced 27% during the same period. The protocol laid out plans late January to enter the U.S. market and pursue securities licensing in the country. Meanwhile, bitcoin (BTC) rebounded above $101,000 from the overnight lows and was 4% higher in a 24-hour period. The broad-market benchmark CoinDesk 20 Index consisting of large-cap tokens lagged with a 2% gain. Sophisticated investors often analyze the fastest horses recovering from capitulation lows to identify underlying strength in the broader market. RWA tokenization is a red-hot sector that aims to bring traditional financial assets like bonds, commodities and real estate on blockchain rails. with increasing participation from global banks and governments fueling the momentum. The RWA sector saw a 200% expansion to $7.3 billion in total value locked (TVL) last year, with government securities protocols leading the growth, crypto trading firm Wintermute noted. Recently, various influential leaders in the financial world touted tokenized RWAs as the next frontier of financial innovation with a potential to become a multitrillion-dollar market this decade. Larry Fink, CEO of asset management behemoth BlackRock, urged U.S. regulators and policymakers to create rules for tokenized securities, envisioning that bonds and stocks will be traded on blockchain rails in the future. He was joined by Robinhood co-founder and CEO Vlad Tenev last week, who proposed rule changes to unlock tokenized private equities to retail investors, currently limited to accredited investors and wealthy individuals. UPDATE (Feb. 3, 21:10 UTC): Adds RWA sector expansion data from Wintermute.

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