Tokenization Is Bringing Wall Street On-Chain

Blockchain-based tokenization is transforming asset ownership and investment by enabling fractional access to luxury real estate, seamless trading of commodities like gold, and participation in private equity markets with the simplicity of digital transactions. As 2025 emerges as a watershed year for the industry, this sector is rapidly accelerating due to technological breakthroughs, regulatory advancements, and institutional adoption. This innovation is redefining ownership models and financial participation—converting traditionally illiquid assets into liquid investments while democratizing access to high-value markets. 

With projections suggesting a $5T tokenized asset market by 2030, key industry players are rolling out groundbreaking platform upgrades and strategic initiatives, underscoring tokenization’s transformative role in global finance. Thus, we thought now was an opportune time to delve into how this innovation is reshaping financial markets and opening unprecedented opportunities for individuals and institutions alike, positioning tokenization as a cornerstone of modern economic infrastructure.

Before we delve into what the landscape looks like, let’s briefly give a breakdown of some of the benefits of tokenization for businesses and end-investors alike.

For Businesses:

Cost savings and operational efficiency: Blockchain disintermediates transactions, lowers costs and accelerates settlements. McKinsey research suggests real-time settlements could save financial institutions $20B yearly by bypassing traditional T+2 delays. Industry implementations like HSBC demonstrate 90% cheaper bond issuance and 40% reduced fundraising expenses versus conventional approaches. Citi’s Integrated Digital Assets Platform (CIDAP) platform with Maersk streamlined trade finance from days to minutes using tokenized smart contracts, while reducing administrative burdens.

Enhanced Liquidity & Market Reach: Tokenization facilitates fractional ownership, liberating capital for traditionally illiquid assets such as private equity or real estate. DAMREV findings show private firms utilizing tokenized shares experienced 30% quicker fundraising and broader investor reach. The tokenization potential is vast, with over $250T in marketable securities available for collateral use, yet only $28.6T is currently employed. Implementing distributed ledger technology for collateral management could further unlock an estimated $100B+ in annual capital for financial institutions, significantly enhancing market accessibility and liquidity.

Improved Transparency & Streamlined Compliance: The financial sector currently allocates $181B annually to compliance, to which tokenization can offer substantial cost-savings.  These sector-focused platforms can slash expenses by up to 50% through programmable rules and streamlined audits. They can automate restrictions on unaccredited investors, eliminating manual oversight, while leveraging digitized identity verification tools to reduce onboarding costs by 30-50% without compromising data privacy. Further, blockchain’s immutable audit trails and automated sanctions screening lower money laundering risks by an average of 26%. Moreover, it standardizes regulatory workflows across jurisdictions, with platforms using verifiable credentials and decentralized IDs cutting cross-border AML checks by 60%. In fact, many institutions report a 30% reduction in audit investigation times, highlighting the efficiency gains of tokenization in regulatory compliance.

For End-Investors:

Similarly, tokenization offers end investors enhanced security, improved user experience, increased access to investment opportunities by lowering barriers to entry. It also provides greater liquidity, potential cost savings, and improved transparency. Moreover, tokenization enables 24/7 trading and near-instantaneous transaction settlements, significantly reducing settlement times compared to traditional markets. As a result, tokenized transactions can be completed within minutes, whereas traditional markets follow a T+2 settlement cycle. Blockchain’s programmability enables the automation of yield opportunities across a broader range of assets that were previously incompatible with one another. This reduces the need for manual intervention and overhead for users. Additionally, it facilitates secondary markets for private equity and real estate, shortening lock-up periods and enabling faster exits.

For Underlying Blockchain:

Tokenization initiatives will significantly enhance blockchains by driving mainstream adoption and expanding their utility across financial markets. By converting real-world assets into digital tokens, blockchains gain access to trillions of dollars in previously illiquid or fragmented markets. This process inherently leverages the technology’s core strengths—transparency, security, and decentralization—to streamline transactions, reduce reliance on intermediaries, and enable fractional ownership. These efficiencies attract institutional investors and governments which are adopting tokenization to modernize infrastructure and improve capital mobility. 

Thus, blockchains benefit structurally from tokenization through heightened network effects. As more assets are tokenized, blockchain platforms become hubs for diverse financial instruments, fostering composability—where tokenized assets integrate seamlessly with decentralized finance protocols, helping to onboard more mature assets into the crypto ecosystem. Additionally, tokenization incentivizes the development of robust regulatory frameworks, addressing early concerns about fraud and compliance. As various industries adopt tokenization, blockchains are expected to evolve into the foundational settlement layer for global economies. This transformation is projected to drive the underlying network’s revenues to $291B by 2030.

Why are we talking about this now?

Since our last Tokenization Report in October 2023, the total tokenized market has nearly doubled in value, growing from $8.8B to $17.2B. 

_{Figure 1: Total Market Value of Tokenized Real-World Assets}

^{Source: RWA.xyz} 

Meanwhile, the number of Real-World Asset (RWA) holders has increased by more than 100%, growing from almost 35K to 72K users. In fact, since the inception of this industry, more than 70M users have interacted with and at least used once with a tokenized product.

_{Figure 2: Total Number of New and Cumulative Users} 

^{Source: 21Shares, Dune}

With this perspective in mind, the sector’s growth has been primarily driven by tokenized government securities and private equities. Protocols catering to these segments continue to dominate market share, as illustrated in Figure 3 below.

_{Figure 3: Breakdown of Tokenized Real World Assets by Sectors}

^{Source: 21Shares, RWA.xyz}

The global financial sector is witnessing accelerated adoption of tokenization, with major institutions migrating traditional funds onto blockchains and established players developing supporting infrastructure. This shift spans asset management, banking services, and regulatory frameworks, reflecting broader industry transformation. This includes:

Institutional Tokenization Initiatives

• Asset managers like BlackRock, Hamilton Lane, Franklin Templeton, and WisdomTree now offer blockchain-based versions of conventional investment vehicles.
• Singapore's Monetary Authority (MAS) spearheads Project Guardian, testing 15+ tokenization use cases across bonds, asset management, and treasury operations.

Banking Infrastructure Expansion

• HSBC deployed its Orion platform for tokenized deposits and gold transactions.
• UBS introduced its “UBS Services” for tokenizing bonds, funds, and structured products.
• DBS introduced its comprehensive “Token Services”, which features programmable rewards, treasury tokens and conditional payment solutions.‍
• Settlement giants Euroclear and DTCC have partnered to develop tokenized asset management frameworks, including but not limited to collaborations with crypto service providers like Chainlink.

Further, the United States is adopting a more favorable stance towards crypto, which is particularly significant for tokenization, as the country leads in the on-chain deployment of tokenized funds across treasuries and institutional investments, with a 61% market share. For example, President Trump recently signed the Executive Order "Strengthening American Leadership in Digital Financial Technology," which promotes the responsible growth of digital assets, blockchain technology, and related innovations across various sectors. This initiative also established the Working Group on Digital Asset Markets to develop a comprehensive federal regulatory framework for the industry, including tokenization. Additionally, the SEC has begun relaxing rules for banks to provide crypto custody services, paving the way for greater institutional participation in tokenized markets. With these developments, 2025 is poised to be a pivotal year for tokenization, with expectations that its influence begins extending beyond finance into sectors such as energy, intellectual property rights, commodities, and real estate. 

Without delay, let’s analyze the top-performing sector: Government Securities.

The sector experienced remarkable growth over the past two years, driven by the high interest rate environment. Assets under management surged from approximately $700M to $3.5B, marking a 400% increase. Meanwhile the user base expanded from around 700 to 13,000 unique holders, representing a staggering 1,757% growth, as shown in Figure 4 below. 

_{Figure 4: Total Number of Tokenized Treasury Holders}

^{Source: RWA.xyz}

Across this vertical, Ethereum retained its dominance, bolstered by its deep liquidity and unmatched network security, which have made it the preferred choice for institutions to launch their initiatives before potentially exploring alternative networks. This reinforces our thesis that Ethereum will remain the de-facto platform for institutional adoption, even as emerging networks like Solana and Aptos gain traction and pose increasing competition.

_{Figure 5: Breakdown of Tokenized Government Securities by Blockchain} 

^{Source: 21Shares, RWA.xyz}

In terms of projects, Franklin Templeton's BENJI product dominated the market. However, Ondo has since established itself as one of the leading protocols, thanks to its diverse suite of offerings that have solidified its position in the industry, as seen below.

_{Figure 6: Breakdown of Tokenized Government Securities by Project}

^{Source: 21Shares, RWA.xyz}

Looking ahead, we expect Ondo to dominate a much bigger market share building on the latest round of announcements and upgrades they recently unveiled at their new annual summit in New York. Specifically, they revealed 2 products:

Ondo Chain:  A hybrid blockchain that blends permissioned security with public accessibility, ensuring compliance, security, and open access to tokenized markets. Advised by industry leaders such as BlackRock, PayPal, Morgan Stanley, Franklin Templeton, WisdomTree, and McKinsey, it leverages expertise from top financial and technology institutions, with key features including:

• Permissioned Validators: Validators are operated by financial institutions and carefully selected, monitored to prevent front-running and malicious activity, ensuring compliance and investor protection. Validators also publish real-time, trusted off-chain data like asset prices and interest rates directly onchain, ensuring scalability and transparency while reducing risks of manipulation.

• Staking with RWAs: Tokenized real-world assets, such as US debt securities (USDY), will be used to secure the network.
  
  • Requiring validators to stake external assets for incentive alignment mirrors the National Securities Clearing Corporation (NSCC) model, where broker-dealers are expected to post high-quality collateral to safeguard settlement integrity—both systems enforce compliance through financial stakes.
  • RWAs can seamlessly integrate into borrowing, lending, staking, and other DeFi activities, preserving traditional DeFi mechanics. 
  • Institutions can also pay transaction fees in RWAs, making costs predictable and removing a key barrier for regulated players.

• Omnichain Bridging: The network will support seamless asset transfers between Ondo Chain and a vast range of EVM and non-EVM chains⁠, including, but not limited to, Ethereum, Mantle, Arbitrum, Aptos, Sui, Solana, Plume, and the Cosmos Ecosystem. 
  
  • The network will utilize a decentralized verifier system to deliver institutional-grade security, allowing RWAs to operate seamlessly across blockchains without relying on bridged assets, escrow contracts, or third-party oracles.
  • This is crucial, as Ondo Chain serves as a central hub for RWAs, consolidating liquidity and eliminating the fragmentation caused by multi-chain issuance scattered across many networks. This impact is reflected in the network’s total value locked, as shown in Figure 7.

_{Figure 7: Breakdown of Ondo’s Total Value Locked by Blockchain}

‍^{Source: 21Shares, DeFiLlama}

Ondo Global Markets (GM): A global investment platform that tokenizes U.S. stocks, ETFs, and mutual funds to eliminate traditional market fragmentation and high fees—leveraging stablecoin-inspired efficiency. It enables 24/7 cross-border trading outside the U.S. while ensuring regulatory compliance. The platform’s key features include:

• Vast Range of Tokenized Real-World Assets: Provides 1:1-backed tokens representing U.S. securities like Apple, Tesla, S&P 500, and mutual funds among others. These tokens will be freely transferable on secondary markets outside the U.S., similar to stablecoins.
• Instant Minting and Redemption: Investors can convert securities into tokens (and vice versa) instantly, mirroring the liquidity of the underlying assets.
• DeFi Integration and Composability: Tokenized assets can be used as collateral for loans, staking, or yield generation in DeFi protocols, enabling cross-collateralization with crypto assets and expanding the universe of assets within DeFi.
• Institutional-Grade Infrastructure: Integrated compliance features, including AML controls and proof-of-reserves verification, enable regulatory compliance while providing token holders access to institutional securities lending markets, with full yield distribution.
• Built-In Access to Margin: Borrow against tokenized holdings at competitive rates typically accessible only to traditional institutional investors.

All in all, while Ondo's upgrade presents significant growth potential, three key risks warrant attention. First, its novel reliance on RWAs for network security remains unproven at scale, exposing vulnerabilities to value fluctuations from market volatility or interest rate changes. Second, the permissioned validator system introduces centralization risks – if Ondo's proprietary oracle faces attacks or manipulation attempts, their entire ecosystem could collapse without third-party safeguards like using external validators such as Chainlink’s Oracle Network. Finally, despite addressing liquidity fragmentation through its omnichain architecture, the effectiveness of Ondo Bridge and its Decentralized Verification Network in mitigating this risk remains speculative until real-world implementation. These challenges demand cautious optimism as the platform begins to roll out.

Private Credit

While government securities dominated in 2023 and 2024 with explosive growth, another sector was quietly gaining momentum in the background — now emerging as the largest real-world asset category after stablecoins. That said, as highlighted in our 2025 Market Outlook, private credit remains one of the industries primed for further disruption this year. To recap, tokenizing this sector enables:

• Secondary Market Activation: Tokenization enables 24/7 trading of private credit positions and equity, reducing the 180–360 day settlement cycles typical in traditional markets. For example, Victory Park Capital tokenized $1.7B in private credit on zkSync, allowing instant fractional trading of SME loans previously locked for 5–7 years, while democratizing exit strategies via token sales instead of a full portfolio exit. 

• Fractional Ownership: By breaking private credit investments into smaller tokens, investors can trade portions of their holdings, improving liquidity. In fact, the Coalition Greenwich survey found that 70% of investors cited liquidity as a barrier to investing in private credit.

• Streamlining Operational Workflows: By automating manual processes like compliance checks, capital calls, and loan servicing, administrative burdens are minimized. Bain & Company estimates that tokenization could unlock $400B in value for alternative investments through automation, while Deloitte demonstrates that digitizing workflows via tokenization reduces operating costs for asset managers overseeing private credit funds.

• Enhancing transparency: Tokenization tackles private credit’s longstanding transparency challenges by leveraging blockchain’s real-time auditability. While 43% of investors avoided private credit in 2023 due to opacity concerns, distributed ledger technology now enables granular tracking of loan terms, collateral status, and payment flows via public blockchain records.

• Collateral Optimization: Smart contracts enable cross-chain collateralization (e.g., using tokenized real estate as margin for private loans), reducing liquidity premiums by around 30% compared to conventional escrow arrangements

All in all, tokenized private credit markets are expanding rapidly, with protocols like Tradable, Maple, and Figure Network driving adoption, shown below. 

_{Figure 8: Total amount of Active Loans on Private Credit Markets}

^{Source: RWA.xyz}

Zooming in, tokenized private credit surged 66% over 18 months to reach its current $11.8B valuation. The Figure Network  dominates onchain private credit with $8.8B in active home equity loans, representing 92% of the market. Meanwhile, Tradable has emerged as a major player, tokenizing $1.7B  in alternative assets like private credit funds, while as shown below, Maple Finance tripled its TVL to over $550M in the last six months through institutional debt pools offering yields above 18%. 

_{Figure 9: Total Value Locked on Maple}

^{Source: 21Shares, Dune}

Higher investment returns will be a major catalyst for this sector's growing adoption, as users embrace greater risk in pursuit of credit yields—currently averaging more than twice the return on U.S. Treasuries, which are expected to decline further in the coming months.

To recap, government securities and private credit currently lead in tokenized asset growth, driven by institutional adoption and regulatory advancements. Initiatives like Ondo’s new developments are expected to accelerate this trend, alongside a favorable macro environment attracting further capital inflows. While government securities and private credit dominate today, real estate and private equity are poised to gain momentum as the industry matures. With a projected $5T tokenized asset market by 2030, the sector is primed for continued expansion, reshaping finance, streamlining operations unlocking unprecedented opportunities across several asset classes, all on–chain. As adoption grows, tokenization not only democratizes high-value markets but also solidifies blockchain's role as a cornerstone of global financial infrastructure.