Emerging Markets Fuel RWA Tokenization Surge, Bypassing Traditional Finance

The tokenization of real-world assets (RWAs) is quietly reshaping the financial landscape in 2025, with emerging markets leading the charge. Jesse Knutson, head of operations at Bitfinex, predicts that economies with underdeveloped financial infrastructure will adopt RWA tokenization faster than their developed counterparts. By leveraging blockchain technology, these markets bypass traditional financial intermediaries and unlock new capital formation channels.

Tokenization allows for the fractional ownership of assets, making investments once reserved for institutional players accessible to a broader audience. This shift is particularly impactful in developing economies, where traditional financing is scarce but demand for capital is high. The ability to tokenize real estate, commodities, and infrastructure is already enabling businesses to attract investors globally.

VCI Global, a key player in this space, unveiled its 2026 roadmap to build a proprietary RWA exchange. The platform aims to support tokenization across sectors like precious metals, real estate, and ESG-linked projects. The exchange will be integrated with Oobit and Tether's infrastructure, enabling instant settlements and institutional-grade liquidity .

Why Emerging Markets Lead in RWA Adoption

Emerging market economies are adopting RWA tokenization at a faster pace due to their ability to leapfrog outdated financial systems. Unlike developed nations, these economies lack entrenched legacy infrastructure and can directly integrate digital financial rails. This leapfrogging effect allows for the swift adoption of tokenized assets and stablecoin-based transactions according to analysis.

Knutson emphasized that tokenization helps overcome "friction" in capital formation and foreign investment in emerging markets. By enabling onchain capital formation, tokenized assets allow for the efficient allocation of capital without the need for traditional banking systems. This advantage is particularly relevant in markets where access to traditional financing is limited as data shows.

Fractional ownership, a key benefit of RWA tokenization, is also gaining traction in these markets. Investors who previously could not afford high-value assets like real estate or commodities can now purchase small fractions. This democratization of access is helping to build a more inclusive financial ecosystem, especially in regions where wealth inequality remains a challenge according to research.

Market Projections and Institutional Involvement

The tokenized RWA market is expected to grow substantially over the next decade, with market capitalization projected to reach several trillion dollars. However, this growth hinges on major issuers transitioning from pilot programs to commercial products. Currently, many institutions are testing the waters with tokenization, but widespread adoption requires clear regulatory frameworks and investor confidence as analysts predict.

VCI Global's RWA Exchange aims to address these challenges by providing a regulated, blockchain-verified marketplace. The platform is designed to facilitate secondary trading and institutional-grade governance for tokenized assets. The company is already working on initiatives like the $200 million Bridge Gold mandate, which tokenizes physical gold stored in bank-grade vaults. This approach combines the transparency of blockchain with the stability of traditional assets .

Institutional involvement is also increasing, with stablecoin issuers playing a growing role in the bond market. As the stablecoin market expands, so too does its demand for U.S. Treasury bills. Some analysts predict that this trend will continue, with stablecoins potentially growing tenfold by the end of the decade. This development could further drive demand for tokenized fixed-income instruments, particularly in developed economies according to market reports.

Risks and Regulatory Hurdles

Despite the optimism surrounding RWA tokenization, several challenges remain. One of the biggest hurdles is the legal enforceability of onchain contracts and the need for robust investor protection frameworks. Unlike traditional financial instruments, tokenized assets often lack standardized regulations, making it difficult to resolve disputes or enforce rights according to industry analysis.

Interoperability between different blockchain networks is another issue that must be addressed. The absence of uniform token standards and the technical differences between permissioned and permissionless blockchains create barriers for mass adoption. For tokenized assets to reach their full potential, they must be easily transferable across ecosystems and usable as collateral in decentralized finance (DeFi) applications as experts note.

Regulatory clarity is also a concern. While some countries are embracing tokenization, others remain cautious. The lack of a unified global approach means that institutions must navigate a patchwork of rules, which can slow down innovation. However, early adopters like VCI Global are pushing for a more structured environment by building platforms that prioritize transparency and institutional-grade compliance .

What This Means for Investors

For investors, the rise of tokenized RWAs presents both opportunities and risks. On the one hand, tokenization opens up new asset classes and diversification options that were previously inaccessible. Investors can now buy fractions of real estate properties, commodities, or infrastructure projects, reducing the barriers to entry. This is particularly relevant for retail investors who may not have the capital to purchase entire assets as market research shows.

On the other hand, the market for tokenized assets is still in its early stages, and volatility remains a concern. The performance of these assets will depend on broader macroeconomic factors, including inflation, interest rates, and geopolitical stability. For example, if inflation surges and the Federal Reserve adopts a hawkish stance, the appeal of tokenized assets could diminish as investors shift toward more traditional safe-haven assets according to economic analysis.

Additionally, the success of tokenized RWAs will depend on the ability of issuers to scale and attract institutional participation. Companies like VCI Global are working to bridge this gap by creating platforms that support both retail and institutional investors. If these initiatives gain traction, the tokenized RWA market could become a core component of global finance .

As the market evolves, investors should closely monitor regulatory developments and technological advancements. The next few years will likely determine whether tokenized RWAs become a mainstream investment vehicle or remain a niche market. For now, the quiet revolution in asset tokenization is already reshaping how capital is formed and allocated, particularly in emerging markets where the potential for disruption is greatest according to industry reports.