Introduction to Tokenization
The tokenization of real assets has evolved from an experimental concept to a significant financial reality. As of August 2025, the total value of tokenized assets on public blockchains has surpassed $28 billion, with US state bonds alone accounting for over $6.6 billion. This growth is a testament to the increasing adoption of blockchain technology in the financial sector.
Key Drivers of Tokenization
The growth of tokenization can be attributed to several factors, including the improvement of transparency, processing speed, and capital efficiency. Institutions and regulatory authorities are driving the adoption of tokenization, with Europe, Asia, and Brazil introducing supportive framework policies. Even the US is making progress, albeit cautiously.
Tokenization is not limited to institutional investors; retail platforms like Robinhood are preparing to offer tokenized stock trading. This development is expected to increase accessibility and liquidity in the market. According to a report, the tokenized assets market has grown significantly, with a current value of over $28 billion.
Benefits of Tokenization
Tokenization offers several benefits, including partial ownership, faster processing, and increased transparency. These improvements are no longer theoretical and are directly influencing the way institutions and investors allocate capital. Large global banks have already conducted tokenized repo transactions worth billions, demonstrating the potential of tokenization to reduce counterparty risk and accelerate capital flow.
Leading investment firms have started issuing tokenized bonds on private blockchains, while asset managers are testing tokenized treasury funds on public networks. These initiatives are not innovative in themselves but are targeted steps towards risk reduction, widening distribution, and reducing friction in systematic financial markets.
Regulatory Framework
Regulatory authorities are beginning to catch up with the innovation. In Europe, policymakers have made it clear that tokenization is a priority, not a side project. New initiatives, such as the DLT pilot regime and proposed measures as part of the Single Rulebook (SiU), enable tokenized shares, bonds, and derivatives within clear legal parameters.
Other regions are also making progress, with Singapore and Hong Kong approving pilot projects for funds and structured products. Brazil is driving the adoption of tokenized assets, and even the US is making progress, with the SEC examining proposals to enable trading of tokenized securities on traditional stock exchanges.
Challenges and Future Directions
Despite the impressive growth, there are challenges to be addressed. Global stock exchanges have asked regulatory authorities to scrutinize tokenized shares, warning that many imitation shares do not offer rights such as voting rights or redemption. Liquidity is also a concern, with many tokenized products traded in fragmented markets.
To overcome these challenges, the industry needs to prioritize trust, interoperability, and infrastructure aimed at compliance. The development of protective measures for responsible scaling and the growth of the multi-billion dollar potential of tokenization is crucial. As the market continues to evolve, it is essential to strike a balance between innovation and regulation.
Conclusion
The tokenization of real assets has come a long way, with a current market value of over $28 billion. As the industry continues to grow, it is essential to address the challenges and prioritize trust, interoperability, and infrastructure aimed at compliance. With the right balance between innovation and regulation, tokenization is expected to transform the capital markets, making them more efficient, transparent, and integrated.
For more information on the tokenization of real assets, visit https://crypto.news/tokenization-moved-from-margins-to-a-28-billion-market/
To Vincent is an experienced technology and capital market manager who leads Polymath, where he focuses on developing practical blockchain solutions for private assets. He has spent almost thirty years helping companies combine complex technologies with real market requirements. Before Polymath, he was CEO of Telepin Software Systems for over a decade and expanded its mobile payment network worldwide. He was also a co-founder of Airwide Solutions, an early market leader in the area of secure mobile news transmission. At Polymath, Vincent heads the Polymath Capital Platform and is a member of the Governing Council of the Polymesh Association, where he contributes to driving the approved blockchain infrastructure for regulated assets. He is known for his straightforward approach to solving industry challenges and his track record in implementing innovative ideas into flourishing companies.
