The blockchain-based tokenised asset market has grown to about $39.1 billion. U.S. Treasuries, money market funds (MMF) and other yield-bearing products such as corporate loans make up 61% of the total, an analysis showed. As decentralised finance (DeFi) and tokenised assets combine with existing financial services, financial companies’ roles in product intermediation and risk management are also becoming more important, it said.

Toss Insight, a financial management research institute at Toss, published a report on Oct. 16 titled "DeFi and tokenised assets: Linking traditional finance and on-chain finance" outlining the findings.

The report said the tokenised asset market stood at about $39.1 billion as of early September this year. Tokenisation is a technology that implements traditional assets such as stocks or bonds in digital form so they can be traded on a blockchain.

U.S. Treasuries, MMFs and credit products such as corporate loans accounted for about 61% of the market. Toss Insight said that while tokenisation of various assets is possible, the market is still forming around products that generate stable interest income or are easy to use as collateral.

It also said tokenisation can improve investor access, but that should be distinguished from the range of products that investors can actually invest in. Tokenised assets allow small-amount investments, but eligibility can be restricted depending on product structures and regulations in each country.

In particular, many tokenised U.S. stocks currently traded operate under a structure in which investors receive gains or losses tied to share price movements instead of owning the actual shares. Tokenised Treasuries or funds are also often sold only to investors who meet certain qualifications.

The combination of DeFi and traditional financial firms is also expanding. The report introduced an example of U.S. crypto exchange Coinbase providing lending products by using Morpo, an external DeFi service.

Under this structure, customers access lending services through an existing exchange, but the actual lending function is handled by an external DeFi service. Financial firms manage the customer interface, while blockchain-based specialist operators perform the financial functions.

Toss Insight said that even if specialist operators handle product development and management in this way, the role of existing financial firms connecting to individual investors is expected to become more important. That is because investors can access on-chain financial products through the financial apps they routinely use.

It cited key risk factors including differences in investor rights depending on product structures, potential losses from program errors such as smart contracts, and operational problems at external services. It said financial firms need to fully understand and manage related risks when offering products.

Kim Hyun-man (김현만), a leader in Toss Insight’s strategy consulting team, said, "DeFi and tokenised assets have begun to combine with services of existing financial firms, beyond experiments inside the blockchain." He said, "The role of financial firms in deciding which products to provide and how to provide them safely is becoming more important."