Tokenized capital markets are moving from experiment to long-term strategy, according to new research from Deutsche Bank, which argues that blockchain-based issuance and settlement could become standard infrastructure by the 2030s rather than a niche financial tool.
The bank’s analysis suggests that tokenization is less about removing traditional financial players and more about upgrading how capital markets operate. Custodians, banks, and settlement agents are expected to remain central, but increasingly operate on digital rails that offer faster settlement, better transparency, and more automation than today’s legacy systems.
Key Takeaways
Tokenized real-world assets could grow into a multi-trillion-dollar market by the mid-2030s.
Adoption is expected to be gradual, with liquidity and regulation acting as primary constraints.
The US could reinforce dollar dominance by leading tokenized capital market infrastructure.
Tokenization grows, but at a measured pace
Deutsche Bank adopts a deliberately cautious outlook, estimating that tokenized real-world assets – excluding stablecoins – could reach around $1.5 trillion to $2 trillion by 2030. By 2035, that figure could expand to roughly $3 trillion to $4 trillion if infrastructure and regulation mature as expected.
Rather than an explosive shift, the bank sees a gradual transition. Regulatory progress is expected to continue unevenly across regions, with Europe advancing slowly through frameworks like MiCA and pilot programs, while the United States remains fragmented due to competing legislative efforts. Full-scale adoption, in this view, is unlikely before the early 2030s.
Liquidity remains the key bottleneck
One of the biggest constraints highlighted in the report is secondary-market liquidity. While tokenized bonds, loans, and funds already exist, trading activity remains limited. According to Deutsche Bank, true market depth will only emerge once interoperable settlement systems are widely deployed, a milestone the bank does not expect until around 2029 to 2032.
As a result, tokenization is expected to remain concentrated in a narrow set of assets for most of the decade. US Treasuries, money market funds, and credit products are likely to account for more than 80% of tokenized volumes, while equities and real estate remain relatively small segments until later.
Banks move cautiously toward digital rails
The report also notes that banks are unlikely to migrate core infrastructure overnight. While several global institutions are already running pilots in custody and settlement, Deutsche Bank believes broad migration across the banking sector will be uneven and slow. Legacy systems, regulatory uncertainty, and operational risk remain significant hurdles.
That said, the long-term incentives are clear. Tokenization could lower operational costs, shorten settlement cycles, and reduce counterparty risk, making it difficult for banks to ignore once standards solidify.
Why the United States stands to gain
Deutsche Bank argues that the US is uniquely positioned to benefit if it embraces tokenized markets. By digitizing Treasury issuance and settlement, the country could deepen liquidity, attract foreign capital, and reinforce the global role of the US dollar. Dollar-denominated tokenized assets could increasingly trade on global blockchains, strengthening international demand for USD-based instruments rather than weakening it.
