Exploring Real-World Assets (RWA)

The crypto bull market is not only driving up the large, established cryptocurrencies such as Bitcoin and Ethereum. Memecoins such as Dogecoin (DOGE), Pepe, and Shiba Inu, which have a lower market capitalization and are particularly volatile, have recently attracted great attention with impressive price rallies. 

By contrast, the increases in real world assets (RWA) have attracted less public attention - although many experts believe this crypto segment has excellent prospects…

Introduction to RWA

As the name itself suggests, Real World Assets represent tangible and other assets existing in the “real world” (real estate, exchange-traded commodities, art objects) tokenized for use in the DeFi segment. The growing interest in tokenizing real-world assets stems from the promise of greater transparency, security, and global market reach. 

Let the numbers speak for themselves: the DeFi industry has boomed over the past few years, peaking at $181.22 billion in total value locked (TVL) on December 2, 2021. According to DefiLlama, RWA is steadily carving out its space in this ecosystem, with a TVL exceeding $8 billion in January 2025.

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Current Use Cases and Industries

The real world assets market is not yet fully formed, but it has already been divided into categories of projects that belong to the general trend of tokenized real-world assets.

Centralized Stablecoins

Popular coins such as USDT from Tether or USDC from Circle are inherently RWAs. Token issuers lock fiat currencies and government or commercial securities in their accounts as collateral. They then issue stablecoins, which is a tokenization.

Private Lending

MakerDAO, the DAI stablecoin issuer, is one player in this field. In mid-2022, the company opened a $100 million tokenized credit line for the American Huntingdon Valley Bank and promised off-balance sheet loans as security. The USDC issuer also offered developments in this market - it launched the Perimeter protocol, which serves as the basis for creating tokenized credit markets.

Government Bonds

The sector is represented by companies issuing stablecoins secured by treasury bonds of any country. For example, Ondo Finance issues a stablecoin, USDY, secured by short-term U.S. Treasury bonds. This includes the Mountain Protocol project, which launched the USDM stablecoin based on the Ethereum blockchain.

Tokenized Securities

The crypto exchange Bitfinex was the innovator in this sector. In September 2021, its subsidiary platform Bitfinex Securities, focused on the RWA market, began operations. In October 2023, it issued its first tokenized bond with a 3-year maturity period and a 10% rate. 

Institutional Investors

They have also shown interest in the sector. The biggest bank in the United Kingdom, HSBC, intended to provide a service allowing clients to own tokenized assets by 2024. Tokenized Collateral Network (TCN), a mechanism for turning shares into digital assets, was first offered by conglomerate JPMorgan in October 2023. Additionally involved in the development were financial behemoths BlackRock and Barclays.

Real Estate

Tokenizing property ownership enables fractional ownership, hence improving smaller investors' access to the real estate market. MadeDAO loaned $7 million in DAI to conglomerate Société Générale in January 2023. French-regulated mortgage bonds valued at forty million dollars collateralized the loan.

Carbon Credit Certificates

The market for green certificates gained popularity in 2022. For example, the KlimaDAO project, in which billionaire Mark Cuban invested, offered carbon credits to crypto users. In theory, the rising prices of such certificates should have encouraged polluting companies to reduce emissions. However, this is a very underdeveloped market at the moment.

Works of Art and Collectibles

The NFT market helps to depict this section. Several businesses and investors once tokenized artworks of well-known painters, therefore adding value to blockchain in 2021. For instance, Swiss crypto bank Sygnum split Pablo Picasso's work "Girl in a Beret," 4,000 tokens, into a series of NFTs. For $22 million, Tron creator Justin Sun purchased Picasso and Andy Warhol artworks to tokenize them using the JUST NFT Fund.

Precious Metals

Participants in this area of the RWA market are issuers of stablecoins that have precious metals in physical form as collateral. Examples include tokens from Paxos or XAUT from Tether.

Advantages of Tokenizing Real-World Assets

The advantages of creating investment instruments on blockchain from a business perspective are:

• Cost reduction is achieved by eliminating intermediaries like lawyers, brokers, banks, etc.
• Fast and efficient 24/7 trading of assets traditionally traded only during “business hours”.
• Lower entry barriers.
• Increased liquidity of assets.
• Transparency of processes.

For asset owners, investors, and traders, RWA tokenization offers:

• Greater accessibility, requiring only an Internet connection and a digital wallet.
• Lower transaction fees and commissions.
• Reduced risks in trading and asset sharing.
• Simplified asset exchange, storage, and management.
• Direct trading between buyers and sellers.

Regulatory Foundations for RWA Adoption

The accessibility of RWA depends critically on rules and jurisdictions. Different nations have varying rules around ownership and investment in assets, which can either make it impossible for foreign players to invest without institutional support or help it. Therefore, building a strong legal compliance system is crucial to guarantee that RWA token issuing, trading, and custody follow legal criteria.

• Securities Laws: Tokenized assets frequently fall under securities regulations, which differ widely across jurisdictions. 
• Anti-Money Laundering (AML) and Know Your Customer (KYC) Requirements: AML and KYC rules are critical for preventing money laundering and fraud. Platforms dealing with tokenized assets must adhere strictly to these standards.
• Data Privacy Laws: To ensure data security and compliance, investor data handling during tokenization must align with privacy regulations like Europe's General Data Protection Regulation (GDPR).

Let’s now examine how different main regulatory authorities worldwide handle tokenized assets, stressing important regional distinctions that influence the legal environment for RWA.

United States

Federal authorities like the SEC and Commodity Futures Trading Commission (CFTC) make rules while states enforce their laws, making the U.S. regulatory scene more complicated. While this fragmentation presents difficulties, it also allows some to be innovative.

European Union (EU)

With projects like the Markets in Crypto-Assets (MiCA) rules, the EU adopts a consistent stance. Across all member states, MiCA offers clear regulations and consumer protections for digital assets, including tokenized RWAs, promoting a harmonic regulatory framework.

United Kingdom

Emphasizing investor safety and respect for anti-money laundering (AML) rules, the Financial Conduct Authority (FCA) in the UK approaches asset tokenization gingerly. Working with the sector, the FCA is looking at potential uses of tokenization that would be more transparent, efficient, and accessible to a larger range of consumers.

Lichtenstein

Since January 2020, all Liechtenstein-based blockchain businesses have been licensed under the Token and Trustworthy Technology Service Provider Act. To facilitate RWA, the token generator's already regulated activity will be modified so that the creator is only responsible for the token's technical quality. At the same time, the so-called tokenization service provider is responsible for both the token's technical and legal quality.

Switzerland

Renowned for its progressive attitude, Switzerland presents a strong digital asset and tokenizing system. Under certain regulatory rules, the Swiss Financial Market Supervisor Authority (FINMA) distinguishes tokens into three categories: payment, utility, and asset.

United Arab Emirates

Two draft rules, one on security tokens and one on commodities token contracts, have lately been published by the Securities and Commodities Authority (SCA) UAE. The new guidelines seek to create a legal framework for United Arab Emirates' tokenized asset issuing and transaction.

Japan

In 2025 there is still no definition of an RWA token under Japanese law. Still, in 2024, the Japan Association (JCBA) presented the "Approach to Key Regulations for Issuing RWA Tokens". This document is a guide to emphasize the main regulatory ideas. On the other hand, the JCBA was founded to foster the growth of a stable tokenized market in the region and create a pleasant commercial climate.

Hong Kong

Regulators in Hong Kong have been actively attempting to foster an atmosphere conducive to developing digital assets since they realized the revolutionary potential of tokenization. The Hong Kong Monetary Authority (HKMA) has stated its interest in developing a legal framework to facilitate the smooth integration of tokenized assets into the larger financial system. Hong Kong's Securities and Futures Commission (SFC) issued the first-ever rules for digital asset trading platforms in October 2022, paving the way for the region's official RWA tokenization launch.

Singapore

The Monetary Authority of Singapore (MAS) established a sandbox for testing new initiatives and released thorough criteria for issuing security tokens. Based on "same activity, same risk, same regulation," MAS ensures clarity for businesses by applying uniform regulatory rules to tokenized assets. To actively foster a global market, MAS works with regulators worldwide, interacting with groups such as the Committee on Payments and Market Infrastructures (CPMI) and the Financial Stability Board (FSB).

How to Begin RWA Tokenization: Key Stages

When one decides to begin RWA tokenization, there are a couple of crucial steps. We’ve gathered them to present clear, step-by-step instructions and a foundation for future success.

1. Identify the Real-World Asset: As mentioned, there are countless fields with which to start tokenization. Everything from real estate to commodities can be tokenized. To ensure the long-term success of the idea, this step requires you to do your own research and analyze market demand and liquidity potential.
2. Verify Ownership and Compliance: Ensure the asset has appropriate registration and licenses to comply with the laws and regulations in your region. Additionally, anti-money laundering (AML) and Know Your Customer (KYC) requirements must be ensured.
3. Develop a Smart Contract & Define Tokenomics: A well-experienced team of developers is crucial at this stage. We advise searching for teams with expertise, especially in blockchain development. Don’t forget about creating tokenomics, which is the face of your project.
4. Token Issuance & Fundraising Strategy: Once the smart contract is complete, tokens are issued on a blockchain network. These tokens can then be purchased using stablecoins or fiat currencies, making them accessible to investors. A clear fundraising strategy (e.g., Initial Coin Offering (ICO), Security Token Offering (STO), or private token sale) must be determined to ensure proper market positioning.
5. Token Marketing & Community Engagement: Marketing plays a crucial role at every step of the token adoption. Your successful campaign should include a presence on social media platforms like Twitter (X), Telegram, and Discord. Cooperation with KOLs and influencers, partnerships with other projects, and crypto-tracking site listings must also be on your to-do list. 
6. Token Management, Trading & Liquidity Provision: We expect the token to be traded in the final steps. Ensuring liquidity, market-making strategies, and exchange listing is required to make the process smooth and without any limitations.

The Future of RWA

The main argument for the prospects of tokenized “real world” assets is that the global market's value exceeds hundreds of trillions of dollars of untapped liquidity. According to Savills, global real estate investments will reach $952 billion in 2025. At least a small part of this is expected to move to blockchain.

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At the end of 2024, according to the Rwa.xyz service, the total RWA Value was almost $15 billion and continues to grow in 2025.

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However, based on the forecasts of institutional companies, major growth has yet to happen, and the market has tremendous prospects. For example, Coinbase analysts believe that the “tokenization boom” will occur in the next one to two years. Growth estimates for the entire RWA market range from $5 trillion to $16 trillion by 2030, according to forecasts by Citigroup and Boston Consulting, respectively.

Conclusion

RWA is still in early stages of development even with its fast expansion. But we can confidently speak about the gradual maturation and significant potential of the segment in the future, especially given its still tiny size compared to the traditional financial market.

F.A.Q.

Q1: What are (RWA) Real-World Assets?

A: Real World Assets (RWA) is a term that refers to a market for “real world” assets issued in the form of tokens on the blockchain. RWAs include real estate, art, jewelry and metals, and traditional financial instruments in capital markets.

Q2: Is RWA a security?

A: Sometimes, RWA tokens can be called securities because of their concept. Still, as the field is in its early stages, classification may depend on regulations or, for example, other factors such as nature and usage.

Q3: How does the RWA token work?

A: The main idea of RWA is to create investment instruments on blockchain that are tied to “real assets.” Instead of being formalized on paper, ownership is recorded in a distributed registry. This makes it possible for parties to trade assets or parts of them directly without intermediaries.

Q4: How to create an RWA token?

A: Like nearly any industry connected to blockchain, building an RWA token calls for a group of developers. Following legal frameworks comes second, once the asset to tokenize has been defined. Further success of the token depends on appropriate promotion as well.