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What does 2025 hold for tokenized real-world assets?
What to pay attention to this year as capital markets move to the blockchain. By Jason Barraza.
Real-world assets (RWAs). This is how cryptocurrency natives and institutions now refer to on-chain representations of real estate ownership, debt, equity, mutual fund units, and other traditional assets.
Throughout 2024, the tokenization of RWAs grew in popularity due to key catalysts including:
BlackRock tokenizes one of its funds and invests in a tokenization company.
Banks and asset managers are moving from proof of concepts to production use cases.
Licenses are being granted such as 21X under the DLT Pilot Regime, Ursus-3 Capital as the first ERIR in Spain, and Nomura's Laser Digital licensed in the Abu Dhabi Global Market (ADGM), to name a few.
Cryptocurrency natives are beginning to understand the value of real-world assets coming on-chain, with RWAs being the third most profitable narrative.
What can we expect in 2025? This should be the year when tokenization solidifies its position and moves into the "pragmatic" part of the adoption bell curve. With over $50 billion in RWAs already on-chain, it is expected that by 2025 at least $500 billion will be reached (excluding stablecoins).
Collateral mobility, yield-generating assets backed by other tokens (i.e., stablecoins/yield coins and tokenized liquidity products), more complex financial products, and proven optimized operations will drive the growth of the market capitalization of tokenized RWAs. Over time, this will increase investor preferences for tokenized versions instead of non-tokenized versions, leading to greater adoption and capital inflows. Real estate alone provides over $30 billion in value, demonstrating savings through the tokenization of home equity lines of credit (HELOC), alternative financing, collateralized loans, on-chain titles, funds, and more.
Regulatory clarity
Regulatory clarity remains one of the main barriers to adoption, but 2025 could bring significant progress. News of the appointment of Paul Atkins as SEC chair, Perianne Boring at the CFTC, and David Sacks as cryptocurrency czar is increasing the likelihood that the United States will have a clear legal framework for digital assets. This would encourage greater institutional participation, increase investor confidence, and stimulate further innovation in the infrastructure for adjustable digital assets. The EU, Switzerland, and Singapore have already demonstrated that stricter regulation, even a sandbox, will further enhance global momentum.
Uniting the crypto community through RWA governance and utility tokens
Tokenization has captured institutional attention due to cost savings and operational efficiency. This is evident both in pilot cases and in production use compared to their off-chain counterparts. In the cryptocurrency realm, governance and utility tokens offer holders discounted trading fees compared to those without tokens, priority access to transaction flow, decision-making, and more.
This is the language spoken by the cryptocurrency community, which will redirect cryptocurrency and NFT profits to RWAs and encourage the creation of decentralized applications or infrastructures for them. Additionally, potential tax exemptions from the Trump administration on cryptocurrency profits issued in the United States (utility or governance tokens) is something that investors and issuers should closely monitor.
In 2025, the tokenization of financial assets should grow as a narrative and as an application. Adoption by major banks and asset managers will produce tangible results and generate confidence to move forward with related initiatives at higher levels of the risk curve. The leveraging of DeFi ecosystems will continue to drive primary and secondary markets by adding utility and enabling new economic opportunities.
This year we will see how the gap between native cryptocurrency communities and traditional finance begins to narrow. Tokenization is no longer a future concept; it is already here and will continue to grow. If you have not been paying attention to this space, now is the time. Regulatory clarity, institutional adoption, and improved utility, among other catalysts such as the Strategic Bitcoin Reserve at the state and federal level, will stimulate exponential growth and adoption.