Tokenizing the Future: The Rise of Real-World Assets

Real-world assets (RWAs) are tangible assets or financial primitives  like real estate, equities, securities, corporate bonds, and government treasuries that can also be brought on-chain through tokenization.

1. History (2012 - 2021)

The history of Real-World Assets (RWAs) in the crypto industry began with early concepts like Colored Coins on Bitcoin (2012), which attempted to represent ownership of physical assets but faced technical limitations. Ethereum's launch in 2015 introduced smart contracts, enabling tokenization. The ERC-20 standard (proposed later in 2017) would become a cornerstone for RWAs.

1.1 Early Tokenisation

The birth of stablecoins dates back to 2014, addressing the critical issue of cryptocurrency volatility. The first stablecoin, BitUSD, was launched on July 21, 2014, on the BitShares blockchain by Dan Larimer and Charles Hoskinson. It was a crypto-collateralized token pegged to the US dollar but struggled to maintain its peg due to reliance on volatile collateral. Later in 2014, Tether (USDT) emerged as the first fiat-backed stablecoin, maintaining a 1:1 peg with the US dollar through fiat reserves. While BitUSD pioneered the concept, Tether's simplicity and adoption during the 2017 Bitcoin bull run established it as a market leader. These early innovations laid the foundation for modern stablecoins, which now play a pivotal role in cryptocurrency trading, DeFi, and cross-border transactions.

In 2016, projects like RealT began exploring real estate tokenization. The idea was to fractionalize property ownership, making it accessible to smaller investors via blockchain tokens.  The Initial Coin Offering (ICO) craze saw projects pitching tokenized RWAs, such as gold-backed tokens and securities. Digix(Digix Gold Token, DGX) launched one of the first successful asset-backed tokens, tying each DGX to 1 gram of gold stored in Singapore vaults.

1.2 Emergence of Security Tokens

With growing regulations, the distinction between utility tokens and security tokens emerged. Security tokens enable the tokenization of traditionally illiquid assets like real estate, private equity, and bonds. Platforms like Polymath and Harbor pioneered security token offerings (STOs), aiming to tokenize assets like equities, debt, and real estate while complying with regulations (e.g., SEC’s Reg D).Security token frameworks integrate securities regulations (e.g., SEC rules or MiFID II in Europe) into blockchain ecosystems. This ensures compliance through automated processes like KYC/AML checks and smart contract-enforced rules, fostering trust among institutional and retail investors. In October 2018, Elevated Returns initiated a security token offering (STO) for the St. Regis Aspen Resort in Colorado. Through this offering, 18 million AspenCoins were sold at $1 each, representing an 18.9% ownership stake in the resort. This initiative marked one of the first significant instances of real estate tokenization, allowing accredited investors to hold fractional ownership via blockchain-based digital securities.

1.3 Impact of RWA on Other Sectors

From 2019 to 2021 the whole crypto industry gained significant growth and institutional interest.  DeFi protocols on Ethereum (e.g., MakerDAO, Compound) began integrating tokenized assets as collateral. MakerDAO added real-world asset collateral (e.g., tokenized invoices) to its DAI stablecoin system via partnerships like Centrifuge. Centrifuge launched Tinlake, a platform for tokenizing non-crypto assets like trade receivables. Tokenized art and collectibles gained traction with platforms like NFT marketplaces(e.g., OpenSea). While NFTs are distinct, they overlap with RWAs by digitizing ownership of unique physical items. Tether Gold (XAUT) launched, offering a stablecoin-like token backed by physical gold, broadening the commodity tokenization trend. Major financial players entered the space. Goldman Sachs explored tokenizing bonds, while Société Générale issued a €100 million bond on Ethereum.  The total market for tokenized RWAs was estimated at $1–2 billion, with projections of exponential growth.

2. Current RWA Landscape

In the past few years, a lot has changed in the crypto industry as a whole, as it matures and prepares for a mainstream push. Larry Fink, CEO of BlackRock, has changed his stance from calling Bitcoin an "index for money laundering" to “digital gold,” leading the way for institutional adoption. 

​2.1 Tokenized U.S. Treasuries

​Tokenized U.S. Treasury securities have witnessed substantial growth, with their market value reaching approximately $7 billion in May 2025 , up from $780 million in January 2024.  They have significantly outperformed stablecoins, while the latter expanded by 27.71% after the 2024 U.S. election, tokenized treasuries has grown significantly. This surge is driven by increasing demand for low-risk, yield-bearing digital assets and advancements in blockchain technology. BlackRock's BUIDL fund has emerged as a leader in this space, surpassing $2.8 billion in assets. Other notable issuers include Franklin Templeton's BENJI fund and offerings from Ondo Finance. These tokenized treasuries offer investors attractive yields and enhanced liquidity, reflecting a broader trend of integrating traditional financial instruments with blockchain platforms.

2.2 Stablecoins 

During the Digital Asset Summit on March 7, 2025, President Trump stated:

“I also want to express my strong support for the efforts of lawmakers in Congress as they work on bills to provide regulatory certainty for dollar-backed stablecoins. […] And things are very much tied, and we want to keep it that way — [to] the U.S. dollar — long into the future. We’re going to keep it that way.” ​

Stablecoins have been the most dominant RWA,  The total stablecoin market capitalization has reached $232 billion. With centralised players like USDT( issued by Tether) and USDC(issued by Coinbase) capturing over 88% of the market, the sector demands for new innovative stablecoin designs. 

Ethena has emerged as a dominant force in the stablecoins market with their unique delta-neutral model making them the third-largest stablecoin, with over $5 Billion marketcap. In December 2024, Ethena launched (in partnership with Securitize) USDtb, a stablecoin pegged to the U.S. Dollar backed by high-quality short-duration treasury assets, ~80% of which are in BlackRock's BUIDL. In March 2025, USDtb’s TVL had increased 547% from $90 million to $1.43 billion.

Usual and Mountain Protocol are also driving innovation in the stablecoin sector by integrating real-world assets (RWAs) and yield-bearing mechanisms, addressing limitations of traditional fiat-backed models. Usual’s USD0 stablecoin is fully backed by tokenized RWAs such as U.S. Treasury Bills and real estate, ensuring robust collateralization and on-chain transparency. Mountain Protocol’s USDM stablecoin introduces a yield-bearing mechanism, distributing daily rewards from the U.S. Treasury yields while maintaining a 1:1 peg to the dollar. 

2.3 Infrastructure Projects

Ondo Finance is a prominent player in the Real-World Asset (RWA) sector, bridging traditional finance (TradFi) and blockchain by offering tokenized U.S. Treasuries and yield-bearing stablecoins. With a total value locked (TVL) exceeding $1 billion, Ondo has emerged as a leader in RWA tokenization, driven by institutional adoption and partnerships with major entities like BlackRock, Google, and Mastercard. Key offerings include OUSG (tokenized U.S. Treasuries) and USDY (a yield-bearing stablecoin), providing accessible, liquid, and transparent financial products. Ondo's innovations, such as the launch of Ondo Chain—a Layer 1 blockchain tailored for RWAs—address challenges like liquidity fragmentation and compliance. These developments position Ondo at the forefront of the growing RWA market, which is reshaping DeFi by integrating real-world financial instruments with blockchain technology.

MANTRA and Plume Network are other leading innovators in the Real-World Asset (RWA) tokenization sector, each addressing key challenges with unique approaches. MANTRA focuses on compliance-driven tokenization, catering to regulated markets like the UAE and MENA region, and has secured high-profile partnerships, including a $1 billion agreement with DAMAC Group for hospitality and real estate tokenization. Its institutional-grade blockchain ensures regulatory adherence, making it a preferred choice for high-value assets like real estate and aviation finance. Meanwhile, Plume Network emphasizes modularity and DeFi integration, leveraging Arbitrum's scalability to tokenize diverse assets such as private credit portfolios, treasuries, and luxury goods. With over $5.5 billion in committed assets and partnerships like CRYMBO for compliance, Plume is driving ecosystem growth through its $25M RWAfi fund. 

Note: Mantra recently had an incident where the token price collapsed by more than 90%. However, according to the founder, the team was not involved in any wrongdoing, and the cascaded liquidation occurred due to an overly leveraged position on a centralized exchange. The founder has also announced that he will burn his team tokens and announce future buybacks. Official statement

2.4 Private Credit Protocols

Underwriting and private credit protocols like Centrifuge, Maple Finance, and Goldfinch play a pivotal role in the Real-World Asset (RWA) sector by bridging decentralized finance (DeFi) with traditional financial markets. These protocols enable the tokenization of private credit, a $1.6 trillion market, by providing access to institutional-grade loans backed by real-world collateral such as trade finance, real estate, and consumer asset-backed securities. 

Centrifuge decentralizes underwriting through its dual-tranche model, aligning incentives while reducing borrowing costs by up to 50%. Maple Finance focuses on over-collateralized lending for institutional investors, offering transparency and risk-adjusted returns, while Goldfinch expands access to private credit without crypto collateral, leveraging compliance standards and partnerships with firms like Apollo and Ares. 

Together, these protocols enhance liquidity, democratize access to high-yield debt instruments, and drive innovation in tokenizing traditionally illiquid assets, making private credit a cornerstone of the growing RWA market.

2.5 Assets Tokenization Platforms

Stocks are gaining traction through equity tokenization platforms like Dinari, which specialize in fractional ownership of equities. Exodus Movement Inc. (EXOD) leads with $401 million in assets under management, while Backed CSPX offers tokenized shares of global equity ETFs.

2.6 RWA Trading Platforms

Innovative trading platforms in the Real-World Asset (RWA) sector are on the rise, leveraging blockchain technology for tokenization, enhanced liquidity, and decentralized access. Platforms like WhiteRock and Parcl exemplify this transformation, enabling decentralized trading of tokenized stocks, bonds, real estate, and city-specific indexes. WhiteRock integrates regulatory compliance with DeFi, offering transparency and yield-generating products like USDX, backed by U.S. Treasury bonds. Parcl democratizes real estate trading by allowing speculation on city-wide price movements through its City Indexes.

3. Regulations

In September 2021, El Salvador became the first country to adopt Bitcoin as legal tender, requiring businesses to accept it alongside the U.S. dollar. ​But this hasn’t been the case everywhere around the world. China has maintained a stringent stance on cryptocurrencies. In September 2021, the People's Bank of China (PBOC) banned all cryptocurrency transactions, citing concerns over financial crime and economic stability.

3.1 Biden Administration & Operation Chokepoint 2.0

Under Biden’s administration, U.S. financial regulators made perceived efforts to indirectly restrict banking services to cryptocurrency-related businesses, including those involved in asset tokenization, known as “Operation Chokepoint 2.0”. Regulators like the FDIC and OCC reportedly pressured banks to limit or sever ties with crypto firms through informal “pause” letters and heightened scrutiny. This restricted access to critical banking services (e.g., custody, payments), stalling tokenization projects reliant on fiat on-ramps and compliance infrastructure.

3.2 Trump Administration’s Stance On Digital Assets

The global regulatory landscape for cryptocurrencies in 2025 has experienced significant shifts, reflecting varying approaches by governments and regulatory bodies. With the first “pro-crypto” US government under President Trump, the U.S. has moved away from "regulation by enforcement," with the SEC dismissing high-profile cases against Ripple, Coinbase, and Kraken.

In March 2025, the U.S. Senate Banking Committee advanced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This legislation aims to create a federal regulatory framework for stablecoins, balancing state and federal oversight, and includes provisions for reserve requirements and consumer protection measures. ​The United States also established a Strategic Bitcoin Reserve (SBR) and a U.S. Digital Asset Stockpile under an executive order signed by President Donald Trump on March 6, 2025. The reserve aims to treat Bitcoin as a national reserve asset, positioning the U.S. as one of the largest state holders of Bitcoin globally.

3.3 Other Notable Regulatory Developments

In the European Union, the Markets in Crypto-Assets Regulation (MiCA) became fully operational in December 2024. It provides a unified framework for crypto asset service providers across member states, covering stablecoins, asset-referenced tokens, and sustainability indicators. Singapore has also finalized its stablecoin framework and maintains a rigorous licensing regime for crypto firms, balancing innovation with investor protection.

3.4 Digital Assets ETFs

The approval of Bitcoin spot ETFs in the U.S. on January 10, 2024, marked a significant milestone after over a decade of regulatory resistance. The breakthrough came after the SEC lost a court case against Grayscale Investments in 2023, where the U.S. Court of Appeals ruled that the SEC had failed to justify its rejection of Grayscale's application to convert its Bitcoin Trust into an ETF. This legal defeat forced the SEC to reconsider its stance and approve multiple applications, including those from BlackRock, Fidelity, and ARK Invest.

As of April 2025, Bitcoin ETFs in the United States collectively hold 1,125,456 BTC, valued at approximately $95 billion, representing 5.36% of Bitcoin's total supply of 21 million coins. BlackRock's iShares Bitcoin Trust (IBIT) leads the market with 574,696 BTC worth $48.5 billion, accounting for 2.74% of the total Bitcoin supply. Other major players include Fidelity Wise Origin Bitcoin Fund (197,262 BTC) and Grayscale Bitcoin Trust (193,307 BTC), each managing billions in assets. The success of these ETFs highlights their role in driving institutional adoption by providing regulated and accessible exposure to Bitcoin for retail and institutional investors alike.

4. Market Size

The Real-World Asset (RWA) tokenization sector has grown significantly, with a total market size of $22.60 billion ($254 billion including stablecoins) as of May 2025. This growth is driven by the adoption of blockchain technology to tokenize assets such as the U.S. Treasuries, commodities, private credit, stocks, real estate, and bonds. The sector is reshaping traditional finance by enhancing liquidity, accessibility, and transparency.

U.S. Treasuries dominate the RWA landscape, accounting for over 50% of the market. Leading projects like BlackRock's BUIDL fund ($2.8 billion), Franklin Templeton's BENJI fund ($759 million), and Ondo Finance ($592 million) offer stable yield-generating instruments that attract institutional investors seeking low-risk options. Hashnote’s USYC fund ($765 million) further strengthens this segment, making tokenized Treasuries the backbone of the RWA sector.

Commodities, particularly tokenized gold, are another significant asset class. Paxos Gold (PAXG) leads with $774 million in assets, followed by Tether Gold (XAUT) with $631 million. These projects provide blockchain-based exposure to physical gold reserves, serving as a hedge against market volatility.

Private Credit is an emerging force in RWAs, addressing liquidity challenges in the $1.7 trillion global private credit market. Key players include Apollo Diversified Credit Fund ($35 million) and Centrifuge ($289 million), which focus on tokenizing trade finance and real estate-backed securities. Platforms like Maple Finance are also driving innovation in decentralized private credit markets.

Real Estate tokenization is rapidly expanding, with over $5 billion in live assets. RealT enables fractional ownership of real estate properties, democratizing access to high-value assets. Landshare focuses on liquidity and transparency in tokenized real estate investments, while RedSwan CRE targets commercial real estate for institutional investors.

Bonds, including sovereign and corporate debt instruments, represent emerging opportunities within RWAs. Projects like Spiko EU T-Bills ($108 million) and Backed ERNX ($11 million) cater to diversified fixed-income markets.

While not directly tied to asset classes, Ethereum leads in market share ($6.13 billion), hosting major Treasuries and commodities. ZKsync Era ($2.20 billion) and Stellar ($473 million) follow, emphasizing scalability and cross-border efficiency.

The RWA sector’s growth is fueled by leading projects across asset classes that leverage blockchain technology to modernize traditional finance. U.S. Treasuries remain the cornerstone of the industry due to their stability and yield, while commodities, private credit, stocks, real estate, and bonds diversify the market further. These innovations are unlocking new opportunities for institutional and retail investors alike, positioning RWAs as a transformative force in global financial markets. As institutional adoption grows, the RWA market is poised to exceed $50 billion by 2025.

5. Future

The Real-World Asset (RWA) tokenization sector is projected to experience exponential growth over the next decade, transforming global finance by integrating blockchain technology into traditional asset markets. According to a joint study by Ripple and Boston Consulting Group (BCG), the market for tokenized RWAs is expected to surge from $0.6 trillion in 2025 to $18.9 trillion by 2033, representing a 53% compound annual growth rate (CAGR). This growth will be driven by institutional adoption, regulatory advancements, and technological innovation.

5.1 Key Drivers of Growth

1. Institutional Adoption:
   Early movers like BlackRock, JPMorgan, and Fidelity are already operational in tokenized markets, focusing on assets such as U.S. Treasuries, real estate, and private credit. Platforms like JPMorgan’s Kinexys have processed over $1.5 trillion in tokenized transactions, while BlackRock’s BUIDL fund has nearly $2 billion in assets under management.
   

2. Regulatory Clarity:
   Jurisdictions such as the UAE, Europe (under MiCA), and Singapore are rolling out comprehensive frameworks for digital assets, enabling institutions to scale their operations with confidence.
   

3. Technological Advancements:
   Blockchain infrastructure has matured into enterprise-grade systems, supporting interoperability, fractional ownership, and automated compliance. Innovations like Layer 3 rollups and zero-knowledge proofs promise sub-cent transaction fees and enhanced privacy.
   

4. Growing Investor Appetite:
   Younger investors are driving demand for digital assets due to their preference for fractional ownership and programmable financial instruments.
   

5.2 Three Phases of Adoption

1. Phase 1 (2025–2027): Institutions focus on low-risk adoption by tokenizing familiar instruments like money market funds and bonds.
   

2. Phase 2 (2028–2030): Expansion into complex assets such as private credit and real estate accelerates as secondary markets mature.
   

3. Phase 3 (2031–2033): Market transformation occurs as tokenization becomes embedded into illiquid asset classes like private equity, hedge funds, and infrastructure-backed debt.
   

6. Conclusion

Today’s RWA landscape is defined by a diverse range of assets and platforms—from stablecoins like USDT, USDC, and Ethena’s USDtb to private credit protocols such as Centrifuge and Maple, and trading platforms like WhiteRock and Parcl. Projects like BlackRock’s BUIDL and Ondo Finance are leading the charge in tokenizing low-risk yield-bearing instruments like U.S. Treasuries, making blockchain-based finance more accessible and secure. 

By 2033, tokenization will redefine global finance through programmable money, instant settlement cycles, and radically improved efficiency across asset classes. The RWA sector is poised to become a $19 trillion market, with institutions that act early shaping the infrastructure for this transformation. As adoption scales globally, tokenization will unlock liquidity in traditionally illiquid markets while democratizing access for retail investors and enhancing operational efficiency for financial institutions.

RWAs are not just a niche innovation—they represent the future of finance, merging the transparency, efficiency, and programmability of blockchain with the stability and familiarity of traditional financial assets.