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• Colin Butler of Polygon Labs views RWA tokenization as a potential “killer app” for crypto, offering significant cost and time savings for institutional clients.
• Tokenization is seen as beneficial for various financial institutions, from small players to international clearing houses, particularly for fund managers with thin margins.
• Butler predicts a $30 trillion global market opportunity in tokenized RWAs, driven by high-net-worth individuals increasing their allocations to alternative assets.

Colin Butler, Global Head of Institutional Capital at Polygon Labs, has always been vocal about his thoughts about real-world asset (RWA) tokenization. Back in the past, he has even emphasized that tokenized RWAs represent a $30-trillion market opportunity globally.

Currently, according to a Cointelegraph report,  Butler sees real-world asset tokenization as a game-changer for institutional clients, calling it the potential “killer app” for crypto. He highlights how the technology slashes costs and settlement times, making it hard for traditional finance to overlook. He also emphasized that tokenization unlocks new business models for financial institutions, once limited by tight margins and competition.

Moreover, Butler pointed to fund managers with razor-thin margins, noting they could see significant cost savings from tokenization. He told Cointelegraph that tokenized assets offer superior collateral for the global financial system, covering FX trades, options, stocks, and bonds. 

According to the Polygon executive, this could be crypto’s “category killer,” addressing a much larger market than any other crypto solution. He emphasized that all financial firms, from small players to international clearing houses, stand to benefit from the cost and settlement time reductions brought by tokenized assets like bonds, U.S. Treasury bills, and stablecoins.

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In a previous interaction with Cointelegraph, Butler noted that the rise of tokenized RWA will be driven by high-net-worth individuals increasing their allocations to alternative assets like private credit. Tokenization adds liquidity and accessibility to these traditionally illiquid assets. 

Furthermore, he highlighted that of the $300 trillion in global assets, $100 trillion are owned by individuals worth between $1 million and $30 million, many of whom currently have minimal exposure to alternatives. He predicted a shift, where private bankers might recommend a 20% allocation, turning this into a $30 trillion opportunity globally.