Emerging Markets to Drive Tokenization of Real-World Assets in 2026
According to Jesse Knutson, head of operations at crypto exchange Bitfinex, the market for tokenized real-world assets (RWA) is expected to experience significant growth in 2026, driven by adoption in emerging markets. Knutson believes that emerging market economies are facing challenges in capital formation and attracting foreign investment, which can be addressed through the tokenization of real-world assets.
Knutson explained that the tokenization of real-world assets, which involves representing physical or traditional assets on blockchain networks, enables on-chain capital formation and bypasses traditional financial intermediaries. This process can help emerging markets “leapfrog” the infrastructure that holds developed markets back and adopt digital rails, including stablecoin settlement, more quickly. As Knutson noted, “Emerging markets also tend to ‘leapfrog’ the infrastructure that holds developed markets back and adopt digital rails, including stablecoin settlement, more quickly than markets with entrenched legacy systems.”
The total value of tokenized real-world assets, excluding stablecoins. Source: RWA.XYZ
Tokenization also enables the fractionalization of assets and democratizes access to investments that may be unaffordable for the average retail investor. Companies that can offer fixed returns to investors but cannot obtain traditional financing are the biggest beneficiaries of asset tokenization. Fixed income instruments, such as U.S. Treasury bonds and money market funds, are the most popular assets for tokenization in developed economies, while tokenization of real estate and commodities are the most popular use cases in developing countries.
Challenges and Opportunities in Tokenizing Real-World Assets
Knutson predicts that the total market capitalization of tokenized RWA will grow to several trillion dollars over the next decade, but growth depends on large issuers moving from pilot programs and sandboxes to actual commercial products. 
Tokenized RWA Market Capitalization Predictions 2024-2030. Source: Bitfinex Securities
Despite the positive outlook for the future of the RWA market, several challenges remain, including the legal enforceability of on-chain contracts, ensuring sufficient liquidity for settlement without slippage, and establishing investor protection frameworks. Creating consistent interoperability standards between different blockchain networks and platforms issuing tokenized assets is also a key challenge that must be overcome to achieve mass adoption.
Overcoming Technical Challenges
Different token standards and discrepancies between permissioned blockchains and permissionless crypto ecosystems pose technical challenges for RWA issuers. To realize the full potential of on-chain assets, issuers must create tokenized products that can be transferred across the crypto ecosystem and used as collateral in decentralized finance (DeFi) applications. As the RWA market continues to grow, it is essential to address these challenges and create a more robust and accessible market for tokenized real-world assets.
For more information on the tokenization of real-world assets and its potential impact on emerging markets, visit Cointelegraph.
