Stablecoins Surpass Visa, Mastercard in Annual Transfers, Driving RWA Growth

Real-world assets (RWAs) are no longer just a theoretical concept; they are gaining significant traction in the onchain ecosystem. Stablecoins, for instance, have become a dominant source of onchain volume, with annual transfers surpassing those of Visa and Mastercard by 7.7% last year. Tokenized US Treasurys are also attracting interest from institutions seeking yield. Stablecoins represent more than just successful tokenization; they have evolved into financial infrastructure, serving as programmable money that other applications can build upon. This platform dynamic is what separates successful RWA projects from those that are struggling. Most tokenized assets are designed as digital replicas rather than as building blocks that can be integrated into broader financial systems.

Tokenization does not equate to adoption. While there is a growing total value locked in RWA dashboards, with more issuers and increased attention, most of this value is parked in a few wallets with minimal integration into decentralized finance (DeFi) ecosystems. Early RWA models focused on wrapping assets for custody or settlement rather than making them usable within DeFi constraints. Legal classification further compounds this issue, limiting how and where assets can move. Stablecoins succeeded because they solved infrastructure problems, not just representation ones. They enable instant settlement, eliminate pre-funding for cross-border flows, and integrate seamlessly into automated systems. Most RWAs, however, are still designed as digital certificates rather than functional components of a broader financial stack. This is starting to change, with newer designs being compliance-aware and DeFi-compatible. Adoption will follow when tokenized assets are built to integrate, not just to exist.

Integration is not just a technical challenge; compliance is the biggest bottleneck for RWA growth. When a tokenized T-bill is classified as a security offchain, it remains a security onchain, limiting what protocols it can interact with and who can access it. The workaround has been to create gated DeFi with KYC’d wallets, allowlists, and permissioned access. However, this approach kills composability and fragments liquidity, which are the very traits that make DeFi powerful. While token wrappers may improve accessibility, they cannot resolve the underlying regulatory status. Legal structuring has to come first. The Senate’s passage of the GENIUS Act marks a significant step forward, establishing a federal framework for stablecoins backed 1:1 by Treasurys. This shift will enable RWAs to evolve from static representations into usable, scalable financial instruments.

One of the strongest value propositions of RWAs is liquidity: 24/7 access, faster settlement, and real-time transparency. However, most tokenized assets today trade like private placements, characterized by thin volume, wide spreads, and limited secondary market activity. Liquidity has lagged because regulated assets cannot move freely across DeFi. Without interoperability, markets stay siloed. Stablecoins show that liquidity comes from composability. When currencies like the euro and Singapore dollar exist as programmable tokens, treasury operations transform from multi-step processes to instant cross-border transactions. Most tokenized assets miss out because they are designed as endpoints rather than interoperable components. The solution is not more tokens but an infrastructure designed for both sides of the bridge with built-in compliance and transparency that meets institutional expectations.

From an institutional perspective, most existing systems might be clunky, but they are compliant and work well enough. Without a step-change in efficiency, cost, or compliance, migrating to blockchain is a hard sell. That changes when RWA infrastructure is purpose-built for institutional workflows. When compliance is structurally integrated and connections to liquidity, institutional-grade custody, and reporting are seamless, it makes going onchain worthwhile. RWAs were intended to bridge the gap between DeFi and traditional finance. However, many are stuck somewhere in between. As institutions inch closer to onchain integration, DeFi protocols face the challenge of adapting their infrastructure to support assets with real-world constraints. DeFi’s most-used assets are still native: stablecoins, Ether (ETH), and liquid staking tokens (LSTs). Tokenized RWAs remain largely siloed, unable to participate in lending markets, collateral pools, or yield strategies. Legal restrictions around asset classification and user access mean some protocols cannot support them without significant modification. This is starting to change, with new primitives designed to make RWAs composable within controlled environments, bridging compliance and usability without compromising. This evolution is critical as it will make RWAs functionally relevant inside DeFi, not just adjacent to it.

The first wave of institutions is now choosing its tokenization strategy. The difference between winning and losing comes down to platform thinking: building infrastructure that others can build upon, not just wrapping assets in digital form. Just as every company needed a mobile strategy in 2010 and a cloud strategy in 2015, institutions now need a plan for tokenized assets. The companies that recognize this shift early will architect their systems to participate in and potentially control the emerging tokenized economy. Those who wait will be stuck building on someone else’s platform, with limited control, less flexibility, and less upside.