Tokenization of Illiquid Assets: Overcoming Liquidity Challenges and Unlocking Institutional Capital

The tokenization of real-world assets (RWA) is poised to redefine the landscape of private markets, addressing long-standing liquidity challenges while unlocking trillions in institutional capital. According to a report by Standard Chartered, the tokenized RWA market is projected to surge from a current valuation of $35 billion to $2 trillion by 2028, driven by advancements in blockchain technology, stablecoin integration, and regulatory progress. This exponential growth-representing a 56x increase in just three years-signals a seismic shift in how traditional assets are structured, traded, and accessed. At the forefront of this transformation is Securitize, a blockchain infrastructure platform that has pioneered the tokenization of illiquid assets through strategic partnerships with industry leaders like Hamilton Lane.

The $2 Trillion Opportunity

The projected $2 trillion market size by 2028 is not merely speculative but rooted in tangible trends. Standard Chartered highlights that tokenized money-market funds and U.S. equities alone could each reach $750 billion, while tokenized private assets-such as real estate, commodities, and corporate debt-will account for the remaining $500 billion. Ethereum's dominance in this expansion is critical, despite competing blockchains offering faster transactions. Its established network effects and developer ecosystem make it the preferred infrastructure for institutional-grade tokenization. However, regulatory clarity-particularly in the U.S.-remains a pivotal factor. As the Securities and Exchange Commission continues to refine its stance on digital assets, the pace of adoption will hinge on whether frameworks evolve to accommodate innovation without stifling it.

Securitize's Strategic Role in Bridging Traditional and Digital Finance

Securitize has emerged as a linchpin in this transition, leveraging blockchain to tokenize private market assets that were historically inaccessible to most investors. In 2022, the company partnered with Hamilton Lane, a global leader in private markets, to tokenize three of its funds covering direct equities, private credit, and secondary transactions. This collaboration, facilitated through Securitize's digital transfer agency, enabled qualified U.S. investors to access institutional-grade private assets via a transparent, on-chain framework. By Q4 2022, these tokenized funds were available on Securitize Markets, a broker-dealer platform designed to streamline digital asset trading.

The partnership's significance extends beyond mere tokenization. In 2023, Securitize integrated Hamilton Lane's Senior Credit Opportunities Fund with Elixir's deUSD, a synthetic dollar stablecoin. This integration allocated up to 5% of HLSCOPE's real-world asset backing to deUSD, creating a stable onchain settlement asset and enabling 24/7 liquidity for investors. Such innovations demonstrate how blockchain can address the illiquidity of private assets by allowing near-instant swaps between tokenized funds and stablecoins across multiple blockchains.

Securitize's influence is further amplified by its strategic funding and partnerships. A $47 million investment in 2024, led by BlackRock and Hamilton Lane, bolstered its infrastructure development and global expansion. In 2025, the company announced a $1.25 billion pre-money valuation via a business combination with Cantor Equity Partners II, positioning it to tokenize its own equity and scale customer adoption. These milestones underscore Securitize's role as a bridge between traditional finance and the digital asset ecosystem.

Overcoming Liquidity Challenges Through Onchain Innovation

The tokenization of illiquid assets is not without hurdles. Private markets have long been criticized for their lack of transparency, high minimums, and limited exit opportunities. However, blockchain technology introduces programmable liquidity, fractional ownership, and real-time settlement, which collectively mitigate these challenges. For instance, Hamilton Lane's collaboration with Republic-a platform for retail investors-aims to lower investment minimums and democratize access to private markets. By leveraging blockchain-based digital solutions, the partnership seeks to onboard a new demographic of investors who previously could not participate in high-performing private assets.

Moreover, the integration of stablecoins into tokenized funds creates a self-sustaining liquidity cycle. As noted by Standard Chartered, stablecoins act as a "bridge between traditional and digital finance," enabling seamless capital flows and reducing reliance on intermediaries. This is particularly evident in HLSCOPE's use of deUSD, which allows investors to mint and redeem tokens continuously, enhancing the fund's utility in both onchain and offchain markets.

The Urgency for Investors to Align with Onchain Infrastructure

With the tokenized RWA market on track to hit $2 trillion by 2028, investors must act swiftly to align with onchain infrastructure. The 56x growth projection implies that early adopters will capture disproportionate value, particularly as regulatory frameworks mature and technological barriers diminish. For institutional players, tokenization offers a dual benefit: it expands their capital base by attracting retail investors and reduces operational costs through automation and transparency. However, the window for strategic entry is narrowing. As Cantor Equity Partners' investment in Securitize illustrates, the next phase of growth will be defined by platforms that can scale tokenization across asset classes and geographies. Investors who delay adoption risk being left behind in a market where liquidity, efficiency, and accessibility are no longer optional but essential.

Conclusion

The tokenization of illiquid assets represents a paradigm shift in private markets, driven by blockchain's ability to reconcile liquidity constraints with institutional-grade returns. Securitize's partnerships with Hamilton Lane and Elixir, coupled with the $2 trillion growth forecast, highlight the urgency for investors to embrace onchain infrastructure. As regulatory clarity and technological innovation converge, the next three years will determine whether traditional finance adapts or is disrupted. For those who recognize the opportunity, the path forward is clear: align with platforms that are not only tokenizing assets but redefining the very nature of capital itself.