Tokenized Real-World Assets Surge 85% to $15 Billion, Attracting Major Investors

Traditional financial markets are facing significant challenges, including illiquidity, opacity, and scalability issues, which have been exacerbated by global trade tensions. These challenges have led investors to seek stable, yield-generating alternatives. Tokenized real-world assets (RWAs) have emerged as a solution to these problems, offering predictable yields and enhancing market liquidity, transparency, and accessibility.

In traditional finance, the process of capital deployment is slow, expensive, and unreliable due to intermediaries like banks. This inefficiency limits market scope and results in significant losses for consumers and administrative burdens for fund managers. The decline in private equity fundraising and US equity issuance highlights these issues. RWAs address these problems by making portfolio management more straightforward and enabling scalable capital deployment even in turbulent markets. Tokenization automates verifiable transactions, providing investors with low-risk, low-cost, and rapid access to global financial markets.

The growth of onchain RWAs, which increased by 85% to over $15 billion in 2024, demonstrates the increasing interest in this asset class. Tokenized private credit, the largest asset in the RWA industry, has a valuation of over $11 billion. This trend is driven by investors seeking stability amidst market volatility and liquidation events. Major financial institutions, including JPMorgan, BlackRock, UBS, Citi, and Goldman Sachs, have invested in RWAs, contributing to the growth of onchain private credit and tokenized treasuries.

Initiatives like Franklin Templeton’s Franklin Onchain US Government Money Fund (FOBXX) and BlackRock’s US dollar Institutional Digital Liquidity Fund (BUIDL) aim to transform money markets through lower settlement times, easier liquidity access, and better trading environments. These funds leverage tokenization to introduce novel yield-generating opportunities in traditionally illiquid markets. According to PricewaterhouseCoopers, this could be a $1.5-trillion disruption, and S&P Global believes private credit tokenization is the “new digital frontier” that solves liquidity and transparency issues.

RWAs are emerging as a viable and lucrative alternative for institutional investors, who control nearly one-fourth of the $450-trillion legacy financial market. The increasing demand from retail users, who make up the remaining three-fourths of the market, further underscores the potential of RWAs. Retail users benefit from RWAs as they make capital markets accessible to grassroots investors, including unbanked populations. Fractional ownership allows those with smaller capital holdings to gain exposure to high-ticket assets.

Retail users will increasingly choose RWAs over traditional financial assets due to the benefits they offer, such as intuitive and hassle-free access to novel financial opportunities through social investing platforms. Multiple reports highlight the massive growth potential of RWAs, which could range from $50 billion to $30 trillion over the next four to five years. Widespread retail adoption will drive this growth, and traditional markets that do not adapt or adopt RWAs risk losing the vast majority of their users.

Robust tools and platforms that leverage RWAs to bridge the gap between traditional and emerging financial markets are already available. This makes it a matter of intent and priority for traditional financial markets to integrate RWAs. The integration of legacy assets onchain and markets leveraging RWAs will benefit issuers, institutions, and retail users, providing a win-win scenario for all parties involved.