Forbes contributors publish independent expert analyses and insights.
Major financial institutions are racing to tokenize everything from U.S. Treasuries to real estate, but how long will it last?
The tokenization revolution is accelerating at breakneck speed with the Senate just passing the GENIUS Act, providing the first federal framework for digital assets that Wall Street had been waiting for. Over 185 crypto tokens are classified as Real-World Assets (RWAs) with their market capitalization over $10.62 billion, a 61% increase from the previous month, according to Tangem. On top of that, the total market value of tokenized RWAs on public blockchains had surged to nearly $18 billion by early 2025, up from about $10 billion just a year before. This unprecedented growth has been driven by institutional adoption that’s finally materializing.
BlackRock’s BUIDL fund now holds $2.9 billion in tokenized U.S. Treasuries, making it the world’s largest tokenized asset fund. Franklin Templeton’s BENJI follows at $776 million, while VanEck launched its tokenized RWA fund called VBILL, offering exposure to US Treasury bills across multiple blockchains in partnership with Securitize.
“BlackRock tokenized a money market fund on Ethereum. Franklin Templeton is running US government bond funds on public blockchains. JPMorgan just ran a cross chain Delivery versus Payment pilot with Chainlink and Ondo. These are not retail projects. These are the most conservative institutions in finance validating a new model,” Mitchell DiRaimondo, founder at Steelwave Digital, told me in a written response.
The current market shows $24 billion in total tokenized assets across 194 issuers, with over 205,000 asset holders, indicating steady growth despite market volatility.
Tokenization strips away the friction that has plagued traditional asset management for decades. Settlement times drop from days to minutes, previously illiquid assets like real estate can be traded 24/7, and compliance becomes programmable rather than paper-based.
“The biggest risk today is assuming that a legal wrapper and a blockchain alone create value,” Ian Balina, CEO of Token Metrics, told me. “Without real composability, reliable secondary markets, and trusted custody, tokenized assets remain stuck in marketing decks rather than investment portfolios.”
Ethereum still dominates the tokenized asset landscape, hosting the majority of Real-World Asset value. But emerging Layer 2 solutions are gaining ground as institutions seek faster, cheaper transactions. The infrastructure buildout extends beyond blockchain networks. Zero-knowledge proofs are enabling privacy-preserving compliance, allowing banks to prove asset backing without revealing sensitive financial information. Cross-chain interoperability solutions are connecting fragmented tokenized asset markets.
“The introduction of zero-knowledge proofs — which make it possible to securely verify that RWAs are backed by real world assets, without revealing sensitive information — has been a huge catalyst for RWAs,” Maxim Legg, CEO of The Pangea Foundation, told me in a written response. “Banks are able to prove that their tokenized funds are backed by real assets, without disclosing sensitive financial information.”
“It’s a structural evolution in how private credit and fixed income funds operate,” David Robnett, Managing Director of Asset Token Ventures, told me in a written response. “Tokenization solves real-world inefficiencies, such as post-trade friction, tax drag, and illiquidity. That makes growth not just sustainable, but inevitable.”
Unlike the speculative crypto cycles of previous years, RWA tokens offer something fundamentally different: real yield backed by real assets. Tokenized Treasury bills currently yield 4-5%, while private credit tokens can offer 8-10% returns — comparable to traditional alternatives but with blockchain’s added benefits.
“Unlike the NFT bubble, where speculative JPEGs dominated and predictably lost value, NFT 2.0, AKA Tokenized RWAs, are grounded in utility,” Dan Silverman, CEO at Balcony Technology, told me in an interview. “The RWA is worth what the underlying asset is worth, eliminating the volatility of speculative hype.”
While stablecoins, tokenized fiat currencies representing over $240 billion of the RWA market, have paved the way, the focus is now shifting to higher-yielding tokenized assets. The GENIUS Act’s framework creates the regulatory foundation for the broader RWA expansion. Here is the sector breakdown:
U.S. Treasuries: $6.2 billion (led by BlackRock’s BUIDL at $2.5 billion and Franklin Templeton’s BENJI at $776 million)
Private Credit: $12.9 billion (platforms like Centrifuge, Maple, and Apollo’s new tokenized fund)
Commodities: $1.4 billion (primarily tokenized gold through Tether Gold and Paxos Gold)
Real Estate: Growing rapidly, with about $3.8 billion in tokenized properties
“Real-World Asset is real and sustainable. It’s likely to go in waves,” Paul Brody, Global Blockchain Leader at Ernst & Young, told me in an interview. “We are going to move towards a second wave of real-world assets like real estate, physical infrastructure, intellectual property, and more that exist off-chain but could benefit from the automation possible with smart contracts and in the efficiency of on-chain settlement.”
Regulatory clarity and guidelines for tokenized assets remain critical for their future development. Infrastructure scaling with cross-chain interoperability solutions and institutional-grade custody services are also maturing rapidly.
The RWA market is projected to hit a $50 billion market cap by the end of this year. For investors, this represents both opportunity and risk, but the institutional validation is real — BlackRock doesn’t deploy billions into experimental technologies.
“The promise of RWAs is to deliver the efficiency and immediacy of crypto markets to a wider investor pool,” Stuart Popejoy, CEO of Kadena, wrote to me in a response. “We’re not trying to tear down the financial system. We’re upgrading it.” The smart money is actively participating, with careful due diligence and risk management. Whether this marks the dawn of a new financial era will depend on execution.
