First comes the tokenization of deposits (stablecoins) and next that of real world assets (RWA)?

This is the prediction of Mike Novogratz, CEO of Galaxy and a long time crypto proponent. He foresees the introduction of IPOs relating to tokenized finance occurring this year. On top of that, his firms plans to tokenize their shares.

All of this is pointing to the remaking of the financial system, albeit in ways that most traditional crypto people did not foresee coming.

Wall Street is firmly entrenching itself in this process. No longer are we dealing with isolated developers putting together patchwork infrastructure. Instead, we are seeing the financial pros, with their huge wallets, entering the scene.

Tokenized finance is going to happen faster than people think. This will present huge opportunities for those who are paying attention.

Source

Mike Novogratz: Tokenized Finance to be Mainstream in 5 Years

There is a big shift in the outlook of many who are tied to Wall Street.

The exit of Gary Gensler, one who was extremely political and well known anti-crypto advocate, has opened the door to a softer regulatory environment. Washington is also working on providing the industry with regulatory clarity, something exemplified with the passage and signing of the GENIUS Act.

According to Novogratz, this is going to open the door to many firms entering with the intention of getting ahead of the curve when it comes to tokenized finance.

Decentralized Finance (DeFi) is already making some noise. We are watching a number of traditional firms connecting with that infrastructure to provide their clients faster, more efficient services.

Here is were TradFi meets DeFi.

Tokenized finance will have elements of both. We can be regulation will be a part of the process as Wall Street is not going to allow competition to enter. This means more bills going through Congress.

One of the reasons for the recent push into Ethereum by different treasury companies is the belief that RWA will be located on that chain. This means that institutions prefer that network over the others.

Since it is still the leader in smart contract chains, this makes sense. If the network can solve the scaling issues, we are looking at the potential for a monumental shift.

If we consider how settlement and actually ownership is handled within the traditional system, it is a nightmare.

Simply put, tokenization is so much easier.

The Tentacles

Much of the focus will be on the major players and the huge applications that are built. This is only natural as they will dominate the market.

The opportunity, however, for average individuals is in the tentacles that end up springing from this. We are going to see smaller opportunities that will generate enormous wealth for some individuals.

Trillion dollar entities are impressive. They are not for the average person. By this I mean, Wall Street (and Silicon Valley) insiders are the ones who profit from that. Most of us are excluded from that.

Tokenization does change things in that we can get involved in under-the-radar projects, ones that do a 1000x before they are even seen. These are the type of deals that major investors have no interest in. The market cap is too low and liquidity lacking. Major players have certain levels they will not play below (say $500 million or $1 billion).

At the same time, those who are holding tokens, as the value rises, are seeing infrastructure built which to maximize the value. The tokenization of RWA means that one can take profits from ABC token that ran up and roll it into IBM, Apple, or Meta.

There will also come a day when one can move that money into US Treasuries along with other debt assets.

To be successful, builders are required. The days of crypto being simply for speculation have to come to an end. This has caused untold amount of issued for the industry since that led the likes of Elizabeth Warren to get up on her soapbox.

It is time for the building of a system. Of course, this is not the forte of most crypto people. Instead, they are nothing more than green candle people.

Wall Street excels at building financial products. Is the industry going to leave that exclusively to them? This is a question that will have to be answered over the next couple years. Protocols like ThorChain and Maya certainly are doing their part to operate outside Wall Street.

Either way, we are watching the tokenization of everything starting to take place.