Disclosure: The opinions and opinions expressed here belong to the authors solely and do not represent the views or opinions of the crypto.news editorial.
Tokenization has become a buzzword, but unfortunately it cannot prove its value. Investors are not convinced, and inconsistent regulations are stagnating. In many cases, assets are tokenized solely for that, without providing improved accessibility, efficiency, or liquidity. Tokenized portfolio-on-chain portfolios are sexy and exciting sounds for crypto-native investors, but it’s a small niche in the market. Tokenization truly takes off requires buy-in from institutional and retail investors who want to modernize traditional assets, and it doesn’t just create digital twins of inefficient traditional products.
So far, the industry’s focus has focused on compliance and real-world assets reorganization, but mainstream investors still lack persuasive reasons to engage. Despite institutional interest from companies like BlackRock, recruitment has slowed as the industry has failed to address core investment concerns. Tokenized assets remain difficult to trade, non-liquid, fragmented regulatory environments. This complexity and doubt makes traditional investors with large portfolios not even bothering the space at all. Institutional investors need to be involved in making some decisions about investing in cryptocurrency, but it takes time. Providing the right education and tools is important when you understand how to confidently navigate tokenized assets.
Core Reality Check
Tokenization should focus on expanding the practical capabilities of investors. In a recent whitepaper, the Boston Consulting Group shows the project in multiple scenarios where assets tokenization could reach trillions of dollars of Amulet (AUM) by 2030. Real value means liquidity, better valuation options, transparency and trust in systems that can leverage these assets smartly. Currently, when holding these assets at major institutions and custodians, the options are very limited. In some cases, assets can be used as collateral, but this process remains complicated and limited. For example, we are not talking about crypto-native investors who put $28.6 trillion worth of assets on-chain. Furthermore, it is impossible to imagine using pension fund managers and meta mask wallets to hold real asset tokens and leveraging them in smart contracts to provide decentralized finance capabilities.
Tokenization offers a unique opportunity to transform traditional finance. By turning static assets into smart contracts, these tokens can automate many financial processes and create new use cases that are not available in traditional finance. However, you cannot rely on old legacy financial infrastructure: traditional custodians, fund managers, and managers. According to the World Economic Forum, tokenization could unlock collateral mobility that is never possible. This process remains expensive and time consuming, but neither institutional nor retail investors are involved. It’s time to turn this into reality and promise to provide authentic, tangible value to attract long-term adoption.
Make sense
The clarity of regulations is contradictory and creates fragmented markets. While jurisdictions such as the Hong Kong Monetary Authority and the Abu Dhabi global market are taking a positive step, fragmented global landscapes have placed compliance as a major challenge. For example, if you want tokenize your ADGM assets and ensure compatibility with assets tokenized under HKMA, or if you want to trade on a decentralized exchange, you must comply with both ADGM and HKMA regulations. Now, imagine there are 150, not just two jurisdictions. Compliance is nearly impossible when each has its own standards and rules, and the dream of a seamless financial system is dying underwater. Large financial institutions and service providers are already working to find out how digital assets like tokenization can be harmonized within a regulatory framework.
We need to promote a global regulatory framework for digital assets, rather than a siloed framework for local law. Without regulatory alignment, tokenized assets risk being confined to niche markets rather than achieving true global adoption.
To reach financial democratization, you need utilities
Tokenization is not just about digitalising the old financial model. New ways to utilize assets, trade and borrow more efficiently must be created. Tokenization is not enough. Assets need to be smarter and provide tangible value to global investors, regulators and service providers. Today, many tokenized investment opportunities are still limited to qualified investors, reinforcing rather than breaking existing financial barriers. True democratization means not only representing the assets of the institution, but also starting access to retail investors.
The industry is still in its early stages. This means there is still plenty of time to shape the future in the right way. The RWA tokenization sector could grow significantly by 2030 if regulators, jurisdictions and innovators can align with the right framework. The future of tokenization relies on moving beyond hype.
