What Are Tokenized Real-World Assets? Putting Physical Value On-Chain With RWAs
Cryptocurrency and blockchain technology aim to transform finance, but digital assets face significant volatility. Developers are addressing this by tokenizing real-world assets like gold, oil, and real estate, providing digital currencies with tangible backing. Tokenization creates a digital representation of an asset on the blockchain, facilitating electronic ownership and transactions. This process enhances access to financial products and allows previously illiquid assets to be used as collateral in decentralized finance (DeFi). Tokenization improves efficiency, security, transparency, and liquidity in traditional industries. Over $10 billion in real-world assets (RWAs) were locked on decentralized platforms by March 2025, with a market capitalization of approximately $37 billion by April 2025. Regulatory clarity is needed for mainstream adoption, particularly regarding stablecoins and legal recognition of tokenized assets. The potential for tokenized RWAs is significant, with predictions of reaching $50 billion in value by the end of 2025, representing a major evolution in financial markets.
