‘We’ve hit peak efficiency’ with legacy tech, says Coinbase exec
Tokenization of RWA will likely begin with the most stable assets, then turn toward more volatile ones over time
metamorworks/Shutterstock modified by Blockworks
Traditional financial infrastructure has reached the peak of its efficiency, according to Coinbase’s head of tokenization.
Anthony Bassil’s remarks came as he appeared as a panelist at the Real World Asset Summit held in New York City on Tuesday. Bassil said he believes that the adoption of tokenization for such assets will occur slowly, in the coming decade or two.
Bassil believes that this process will take time, and much of the adoption of tokenization will come slowly in the next twenty or so years.
Robert Leshner, the founder of Superstate, noted that a transition toward tokenization would likely begin with the most liquid and most stable assets.
“Stablecoins, the tokenization of the simple dollar, was the first killer user case,” Leshner said.
Non-volatile assets are easier to program and can be applied more readily than volatile assets, according to Leshner.
Although uncertain exactly what the next RWA to be tokenized would be, Lesnher noted that a number of companies are exploring the tokenization of US government debt.
Read more: Centrifuge to meet demand for Real World Assets with liquidity pools
This sentiment was shared by Matt Halstead, director at the Teacher Retirement System of Texas, who noted that low-volatility assets represent a potentially safer bet.
“Even real estate is difficult with respect to the tokenization model today,” Halstead said. “There has to be an approach through a data perspective so you can speak the same language.”
Liquidity catalysts
Keerthi Moudgal, head of product of JPMorgan’s Onyx blockchain unit, said that in order to bring more volatile real world assets on-chain, the interest of institutional players — and their liquidity — is required.
Read more: Real world assets in DeFi: Buzzwords or the real deal?
Moudgal contended that regulatory challenges, specifically on the matter of securities rules, would need to be addressed before these assets could be brought on-chain.
“These challenges need to be solved to further drive adoption and functionality,” Moudgal said.
Solving customer problems that currently exist in traditional finance would also aid this process, Halstead argued.
“Institutions are understandably risk-averse,” he said.
User interfaces on DeFi protocols also need improvements, Leshner contended. He went on to say that there are already users willing to tinker with complicated DeFi products for an extra 3% in yield.
“People are motivation-based,” Leshner said.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
