The benefits of tokenization are simple, and the process brings operational efficiency and improves liquidity and accessibility, Bernstein said in a research report on Tuesday.

Read this article in English.

Tokenization is the process by which real-world assets are converted into blockchain-based tokens.

Bernstein estimated that the tokenization opportunity could be up to $5 trillion over the next five years and would be led by stablecoins and central bank digital currencies (CBDCs), private market funds, securities and real estate.

Follow CoinDesk on Twitter.

According to the report, currency tokenization, through stablecoins and CBDCs, will be applied in on-chain deposits and payments with around 2% of the global money supply to be tokenized in the next five years, which is around US$3 trillion, the report added.

“Over the next five years, we expect a surge in stablecoin and CBDC tokens in circulation, led by China’s CBDC program,” the analysts under Gautam Chhugani wrote. “Stablecoin and CBDC tokens, along with yield farming in decentralized markets, will compete with bank deposits as an investment or savings instrument,” the analysts added.

Still, the broker noted the current regulatory uncertainty, saying that “tokenization using blockchain can only be successful when policymakers appreciate the benefits of blockchain and how cryptocurrency tokens are an indispensable part of blockchain operations.”

“How policymakers regulate blockchain-based companies will determine how they view the tokenization of real-world assets,” the note said, adding that “regulations may obscure the advantages of tokenization.”

This article was translated by Natalia Paulovsky.