Real-world asset (RWA) tokenisation — the representation of ownership in physical or financial assets via digital tokens on a blockchain — has progressed rapidly from a niche crypto experiment to an area attracting serious institutional attention. By 2025, the market for tokenised RWAs (excluding stablecoins) had grown to over $10 billion in value, with government securities representing the largest segment. BlackRock, Franklin Templeton, Fidelity and JPMorgan have all launched tokenised fund products. Understanding the technology, the economics, the regulatory position and the risks is now part of any thorough alternatives analysis.
Capital is at risk. Tokenised assets are subject to smart contract risk, regulatory uncertainty and custody risk in addition to the risks of the underlying assets. This guide is for information only and does not constitute regulated investment advice. The regulatory framework for tokenised assets is evolving rapidly and may change.
What Is Tokenisation?
Tokenisation is the process of recording ownership rights in an asset on a distributed ledger (blockchain) as a digital token. The token represents a claim on the underlying asset — whether a US Treasury bill, a share in a private credit fund, a commercial real estate property or a commodity — and can be transferred, traded or used as collateral on the relevant blockchain network.
The theoretical benefits are significant:
- Fractionalisation: traditionally illiquid assets (private credit, real estate) can be divided into smaller economic units, potentially broadening access
- Programmable settlement: smart contracts can automate dividend distributions, interest payments and corporate actions
- 24/7 transferability: unlike traditional securities markets, blockchain-based tokens can be transferred at any time
- Composability: tokenised assets can interact with DeFi (decentralised finance) protocols for collateral management, lending and portfolio management
The practical reality is that most of these benefits are still being realised incrementally, with significant infrastructure, legal and regulatory work remaining.
Tokenised Treasuries and Money Market Funds
The largest and most mature segment of the RWA market is tokenised government securities — primarily short-duration US Treasury bills and money market fund shares.
BlackRock BUIDL Fund (BlackRock USD Institutional Digital Liquidity Fund), launched in 2024 on the Ethereum blockchain, was a landmark institutional entry. The fund invests in US Treasury bills and repurchase agreements, with shares tokenised on-chain. By mid-2025, BUIDL had accumulated several hundred million dollars in assets and was accepted as collateral by several DeFi protocols.
Franklin Templeton's Benji platform tokenises its OnChain US Government Money Market Fund on the Stellar and Polygon blockchains.
Ondo Finance has emerged as a prominent protocol-level provider, offering OUSG (representing short-duration US Treasury exposure) and USDY (a yield-bearing stablecoin backed by Treasuries) with a focus on accessibility for investors who already hold on-chain capital.
These products appeal primarily to cryptocurrency-native investors and institutions that hold significant stablecoin balances and wish to earn yield equivalent to short-term government rates without moving capital off-chain. For traditional investors, the benefit over a conventional money market fund is less obvious.
Tokenised Private Credit
Tokenised private credit represents an attempt to bring the growing private lending market on-chain, potentially increasing transparency, liquidity and accessibility.
Centrifuge is the leading protocol in this space. Borrowers (typically non-bank lenders and small-to-medium enterprises) create pools on the Centrifuge protocol representing real-world loan receivables. Investors purchase tokens representing senior or junior positions in these pools, earning yield from the underlying loan interest.
Maple Finance offers institutional-grade private credit on-chain, with pools focused on crypto-native borrowers (trading firms, market makers) and increasingly, real-world corporate borrowers.
Credix has focused on emerging market private credit, tokenising loans to FinTech lenders in Latin America.
The performance record of tokenised private credit includes notable defaults — particularly during the 2022 cryptocurrency market crisis when several Maple Finance pools backed by crypto trading firms suffered defaults. This experience is instructive: the tokenised wrapper does not change the fundamental credit quality of the underlying borrower.
Tokenised Real Estate
Real estate tokenisation promises fractional ownership of commercial and residential properties with improved liquidity. Early platforms include:
- RealT (US residential real estate tokenised on Ethereum, with fractional rental income distributions)
- LABS Group (Singapore-based, hospitality and resort properties)
- Propy (residential real estate transactions on blockchain)
The regulatory complexity around property title, land registry, transfer taxes and mortgage documentation means that true on-chain settlement of real estate remains largely unachieved. Most tokenised real estate platforms issue tokens representing equity interests in a special purpose vehicle (SPV) that holds the property, rather than tokens that directly represent legal title. This is an important distinction: the token is a claim on an SPV, with all the SPV-level legal and operational risks that entails.
Leading Platforms and Protocols
The tokenised RWA ecosystem includes:
- Ondo Finance: tokenised Treasuries and credit products; growing distribution partnerships with major DeFi protocols
- Centrifuge: open protocol for tokenised real-world assets, including trade receivables and real estate
- Maple Finance: institutional private credit marketplace
- Securitize: transfer agent and issuance platform; worked with BlackRock on BUIDL and other tokenised fund products
- Backed Finance: tokenised ETFs and investment vehicles under Swiss regulatory framework
- OpenEden: tokenised Treasury bills for on-chain investors
Importantly, many of these platforms remain in early development stages and have not yet experienced a full credit or liquidity cycle. Investors should be cautious about placing significant capital in platforms without established track records.
UK FCA Regulatory Status
The UK's regulatory treatment of tokenised assets is evolving. Key points as of 2026:
Financial Promotions Order: the FCA's financial promotions rules apply to crypto assets marketed in the UK, with specific requirements for high-risk investment promotions. Tokenised RWA products may fall under these rules depending on their structure.
FCA Regulatory Sandbox: the FCA has used its Innovation Sandbox (formerly Project Innovate) to allow tokenised asset experiments under supervised conditions. Several RWA projects have participated.
Digital Securities Sandbox (DSS): launched under the Financial Services and Markets Act 2023, the DSS allows firms to issue, trade and settle digital securities using distributed ledger technology within a defined regulatory perimeter. This is a significant step toward a clearer framework for institutional tokenised securities in the UK.
E-money and stablecoin regulation: the UK has introduced specific rules for fiat-backed stablecoins under the FSM Act 2023, supervised by the FCA. Where tokenised RWA products use regulated stablecoins for settlement, they benefit from this framework.
Investors should confirm the specific regulatory status of any tokenised product they are considering. "Regulated" can mean different things in different contexts, and the absence of a clear regulatory framework does not mean a product is unregulated — it may mean it is illegal or operating in a legal grey area.
Smart Contract Risk
All blockchain-based products are exposed to smart contract risk: the possibility that the code governing the token, fund or protocol contains errors or vulnerabilities that can be exploited by malicious actors or triggered by unexpected conditions.
Smart contract audits — conducted by specialist security firms — reduce but do not eliminate this risk. The history of DeFi includes numerous exploits, bridge hacks and protocol failures resulting in total loss of funds. Even audited code can contain vulnerabilities not identified during review.
Investors in tokenised RWAs should understand which smart contracts govern their investment, whether those contracts have been audited, and what recourse exists if a smart contract failure occurs.
Settlement Finality
One of the promised advantages of blockchain settlement is finality — once a transaction is recorded on-chain, it is irreversible. In practice:
- Different blockchains have different finality properties (Ethereum achieves probabilistic finality, though improvements under Proof of Stake are significant)
- Layer-2 solutions and cross-chain bridges introduce additional finality risks
- The legal recognition of on-chain settlement as binding under applicable securities law is still evolving
For institutional investors, the settlement finality question requires legal analysis across the relevant jurisdiction's securities law, contract law and property law.
How Global Investments Can Help
The tokenised RWA space is developing rapidly and its evolution warrants attention from sophisticated investors. Our team monitors developments across the institutional tokenisation landscape — from BlackRock's BUIDL to emerging protocol platforms — and can help you assess whether any specific tokenised product is appropriate for your portfolio, evaluate the regulatory and operational risks, and size a position consistent with your overall risk framework. We do not advocate speculative positions in early-stage protocols.
Contact us to discuss digital assets and tokenised instruments within a disciplined investment framework.
This guide is for general information only and does not constitute financial advice or a personal recommendation. The value of investments can fall as well as rise and you may get back less than you invest. Past performance is not a guide to future returns. Tax rules, investment regulations, and the availability of specific investment vehicles change — always verify current rules and seek advice from a qualified independent financial adviser before making any investment decisions.