Project Diamond: Bringing Real-World Assets on the Blockchain
Coinbase has launched ‘Project Diamond’ in Abu Dhabi, following Binance’s exit from the region. This project aims to bring real-world assets (RWA) on-chain and make them accessible to institutions. Coinbase will use their L2 rollup solution, Base, to enable institutions to create and trade various financial instruments like debts. The project will be powered by smart contracts and will utilize Coinbase’s own tech-stack, including Base, Prime custody service, Web3 Wallet, and the USDC stablecoin by Circle. The Financial Services Regulated Activity (FSRA) of Abu Dhabi Global Market (ADGM) has given in-principle approval for this regulated initiative.
The Potential of RWA on the Blockchain
The RWA market is estimated to reach $10 trillion by 2030. Currently, only 0.25% of global assets are represented on-chain. By tokenizing assets like stocks, the potential benefits include faster settlements, lower operating costs, and increased transparency compared to traditional finance. This opens up opportunities for new user inflow outside traditional finance markets. Project Diamond aims to bridge this gap and is one of many solutions in a competitive market where global banks and crypto projects are also exploring bringing RWA on-chain.
Hot Take: Project Diamond Paves the Way for Tokenized Real-World Assets
Coinbase’s ‘Project Diamond’ marks a significant step towards tokenizing real-world assets in a regulated manner. With the approval from Abu Dhabi regulators, Coinbase is creating a capital marketplace that allows institutions to create and trade digital tokens backed by real-world assets. This initiative aligns with the growing trend of asset tokenization in the financial sector, offering potential benefits such as faster settlements and increased transparency. As more projects like Project Diamond emerge, the market for tokenized real-world assets is expected to expand, potentially reaching a $10 trillion market by 2030. This presents exciting opportunities for both institutions and individual investors in the crypto space.
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