JPMorgan Slams RWA Tokenisation as Insignificant Despite 260 Growth

JPMorgan has raised concerns about the real-world asset (RWA) tokenisation market, describing it as "insignificant" and underperforming despite the hype surrounding its potential. The report highlights that the total market cap of tokenised RWAs stands at just $25 billion, a figure dwarfed by the weekly inflows of U.S. ETFs, which often exceed $25 billion [1]. The report argues that the market remains niche, with most participation coming from crypto-native firms rather than traditional financial institutions like banks and asset managers, which have not yet fully embraced the technology [1].

According to JPMorgan strategists, ETFs continue to offer superior liquidity, regulatory clarity, and investment value compared to tokenised assets. This suggests that institutional investors are not yet convinced of the benefits of RWA tokenisation over existing traditional financial tools [1]. ETF expert Eric Balchunas reinforced this view, stating that if Wall Street had fully believed in tokenisation, we would not see the continued record growth of ETFs [1].

The report also notes that while the RWA market has grown over 260% in the first half of 2025, it remains in its early stages, and growth metrics must be interpreted with context. Demand for tokenised U.S. Treasuries and private credit is increasing, as shown by research from Binance and The Defiant [1]. Additionally, JPMorgan and other major banks are exploring RWA initiatives, such as Project Guardian and the Kinexys platform [1]. This internal investment signals cautious optimism, even as external criticism persists.

Despite the challenges, RWA tokenisation retains distinct advantages. Tokenised government bonds, for example, offer predictable yields and steady income, which are uncommon in the often-volatile DeFi space [1]. These features make RWAs appealing to more conservative investors seeking real-world value.

While JPMorgan’s report casts doubt on the scalability and adoption of RWA tokenisation, it does not definitively conclude that the market is failing. Instead, it suggests that the market is still in a testing phase, with institutions and regulators navigating its complexities [1]. The slow but steady growth of the sector indicates that RWA tokenisation may still deliver on its promise—if it can demonstrate clear and consistent advantages over existing financial products.

Source: [1] Is The RWA Market In Trouble? Latest JPMorgan Report Sheds Light On Severe Underperformance Despite Hype (https://www.livebitcoinnews.com/is-the-rwa-market-in-trouble-latest-jpmorgan-report-sheds-light-on-severe-underperformance-despite-hype/)