Velo Protocol: A High-Velocity PayFi and RWA Infrastructure Play for 2026

The real-world asset (RWA) tokenization market is no longer a niche experiment-it's a full-blown infrastructure revolution. As of late 2025, total on-chain RWA value has surged to $18.7B, more than tripling from $5.6B in early 2025. At the center of this shift is Velo Protocol, a cross-border payment and tokenization platform that's redefining how institutions and emerging markets access liquidity, yield, and settlement efficiency. With strategic partnerships, institutional-grade infrastructure, and a focus on Asia's digital finance needs, Velo is positioning itself as a critical node in the RWA ecosystem-and a compelling investment thesis for 2026.

Strategic RWA Tokenization: Bridging TradFi and DeFi

Velo's core value proposition lies in its ability to tokenize real-world assets while maintaining institutional-grade security and compliance. The protocol's Orbit Plus Super App, now available in 15 countries, serves as a multi-chain hub for managing stablecoins, tokenized RWAs, and cross-border value transfers. This app is more than a user interface-it's a gateway to a broader vision of integrating traditional finance (TradFi) with decentralized infrastructure.

A key example of this integration is the ASEAN Settlement Network, a collaboration with EVOLVE Chain and Lightnet. According to reports, this network offers yield-bearing tokenized U.S. Treasuries (TBILLs) and instant regional settlements, addressing a critical pain point for institutional investors seeking safe, liquid assets in emerging markets. By leveraging tokenized TBILLs, Velo is not only democratizing access to U.S. government securities but also reducing settlement times from days to seconds-a feature that could attract asset managers, hedge funds, and central banks.

Institutional Adoption: Partnerships as a Catalyst

Institutional adoption is accelerating, driven by Velo's partnerships with major players in both TradFi and DeFi. For instance, the protocol has integrated BlackRock's tokenized short-term Treasury fund (BUILD) into its USDV reserves via Securitize, a move that signals growing trust in Velo's infrastructure. This partnership is particularly significant because it aligns with BlackRock's broader strategy to tokenize ETFs and expand its footprint in digital assets.

Moreover, Velo's collaboration with Paxos and Securitize to implement the PAYFAI AI Settlement system highlights its focus on SMEs and trade finance in Southeast Asia. According to analysis, this AI-powered solution optimizes FX settlements and compliance tools, addressing a $2B gap in tokenized institutional alternative funds and private credit markets. By automating cross-border transactions and reducing counterparty risk, Velo is creating a flywheel effect: more institutional liquidity attracts more tokenized assets, which in turn attracts more institutional players.

TVL Growth and Market Resilience

Velo's financial metrics underscore its resilience and growth potential. As of June 2025, the protocol's market capitalization stood at ¥628.93 million CNY, with a circulating supply of 7.39 billion tokens. This performance is notable given the broader crypto market's volatility, suggesting strong demand for Velo's infrastructure play.

The TVL growth in the RWA sector-driven by tokenized U.S. Treasuries ($7.3B), private credit ($17B), and commodities ($2B)- has directly benefited Velo. The protocol's focus on Asia-based liquidity infrastructure has allowed it to capture a significant share of the region's digital finance landscape, where traditional banking systems are often fragmented. This regional focus is a strategic advantage, as regulatory clarity in Singapore and Hong Kong (e.g., the U.S. GENIUS Act) has enabled banks to engage with tokenized assets.

Roadmap for 2026: Solana Integration and AI-Driven Settlements

Looking ahead, Velo's roadmap is packed with initiatives that could further catalyze adoption. The Solana cross-chain integration, set to launch by year-end 2025, will enable asset transfers between Nova Chain and Solana, enhancing liquidity for RWA tokenization projects. This move is critical because Solana's high throughput and low fees make it an ideal partner for scaling cross-border settlements.

Additionally, the PAYFAI AI Settlement system is expected to expand its footprint in 2026, targeting SMEs in Southeast Asia. According to market analysis, this system leverages machine learning to optimize FX settlements, addressing a $30B gap in the tokenized RWA market. This system not only reduces operational costs but also aligns with broader trends in AI-driven finance, a sector projected to grow exponentially in the coming years.

Valuation Upside and Investment Thesis

Velo's valuation story hinges on its ability to capture a significant portion of the RWA and institutional settlement markets. With Ethereum's TVL potentially surging 10× in 2026 due to institutional participation, Velo's multi-chain infrastructure and partnerships position it to benefit from this growth. The protocol's focus on yield-bearing assets (e.g., tokenized TBILLs) and compliance tools also aligns with the needs of institutional investors, who prioritize security and regulatory compliance.

Moreover, Velo's TVL growth and institutional adoption metrics suggest a strong flywheel effect. As more institutions tokenize assets on the platform, Velo's network effects will amplify, creating a self-reinforcing cycle of liquidity and innovation. This dynamic is particularly compelling in Asia, where the protocol's regional expertise and partnerships with entities like Thailand's CP Group provide a competitive edge.

Conclusion

Velo Protocol is not just another blockchain project-it's a foundational infrastructure play in the RWA and institutional settlement space. By combining strategic partnerships, institutional-grade security, and AI-driven solutions, Velo is addressing the core challenges of liquidity, compliance, and cross-border efficiency. As the RWA market matures and regulatory frameworks solidify, Velo's position as a bridge between TradFi and DeFi could unlock significant valuation upside for investors in 2026.