Investor Interest Shifts Toward Tokenization of Real-World Assets, Bank of America Says

While dollar-backed stablecoins remain central to digital asset discussions, Bank of America (BAC) says investor conversations are increasingly turning toward the tokenization of real-world assets (RWAs) such as equities, bonds, deposits, and real estate.

In a Monday report, BofA called the shift “the early stages of a multi-year transition” toward fully on-chain financial infrastructure. This transformation, the bank noted, will require new layers of infrastructure but promises round-the-clock access, global interoperability, instant settlement, and smart contract-enabled compliance.

Tokenizing traditional assets involves issuing blockchain-based representations of physical or financial holdings, improving liquidity, enabling fractional ownership, and expanding market access.

BofA highlighted Dubai’s recent initiative with the Land Department (DLD) to tokenize up to $16 billion in real estate by 2033 as a prime example of this trend. The effort also introduces fractional ownership to broaden participation in a historically illiquid sector.

The bank noted that institutional investors are closely evaluating how this technological shift could impact legacy players like Citigroup (C), whose transaction services arm generates roughly 40% of its profit. While blockchain poses risks to traditional fee-based and interest-driven revenue models, BofA believes Citi’s blockchain capabilities may be underestimated.

“The growing push toward asset tokenization marks a critical step in the real-world integration of blockchain,” the analysts wrote, underscoring that the implications could reshape financial markets in the coming years.