TL; DR
Full story
Imagine being told that you will only get one bonus this year.
If you were used to receiving multiple bonuses per year, this may be disappointing.
But if you had never received a bonus in your life, that would be welcome news.
That’s pretty much how we feel about this latest McKinsey report.
The company estimates that by 2030, $2 trillion in real-world assets, or RWAs (think stocks and commodities like oil and gold), will be traded on the blockchain.
That’s lower than previous reports from rival companies that had a figure closer to $10 trillion by 2030.
But RWAs actually only reached the point of plausibility a few months ago, when large traditional financial firms began publicly endorsing the idea and working toward making it a reality.
So whether it’s $2 trillion or $10 trillion worth of RWAs in 2030, it doesn’t really matter: either option is better than $0.
And honestly, the slow approach makes sense, for these three reasons:
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Regulatory friction
The SEC has leaned in and embraced Bitcoin and Ethereum ETFs… but they have done so begrudgingly. Allowing the stock market to move on blockchain rails will undoubtedly be slowed by red tape.
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Reliable blockchains are not fast enough
The powers that be have expressed interest in building within the Ethereum ecosystem – which is feasible for now, but not yet scalable.
‘High speed’ Ethereum layer 2s, like Base, have a theoretical limit of ~1,400 transactions per second (TPS), while the NASDAQ exchange handles ~20,000 TPS.
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Fast blockchains are not reliable enough
“Okay, so why not build on Solana instead of Ethereum – it has a max theoretical limit of ~65,000 TPS?”
Well, Solana has a habit of going offline for hours/days at a time. This could/should be fixed in the future, but traditional finance will want this to be proven through heavy testing before launching RWAs there.
The takeaway:
There is a high probability that RWAs will be launched on the blockchain and attract trillions of dollars in investments.
…it only takes a minute (and a whole lot of work).