Revolution—Not Evolution: Detangling tokenization of RWAs

Tokenization of real-world assets is rapidly moving from concept to implementation, with on-chain exposure to instruments like treasuries, private credit, real estate and now equities growing several-fold since 2023. Early activity from firms such as Franklin Templeton, Robinhood, Kraken and Ondo has demonstrated real demand for tokenized funds and stocks, while recent moves by DTCC, NYSE and Nasdaq signal that core market infrastructure is preparing for a tokenized future.

Advisors should recognize that not all tokens are created equal: synthetic structures maximize flexibility in the crypto ecosystem but offer fewer investor rights, digitally native tokens combine full ownership with improved liquidity and settlement speed, and digital twins prioritize compatibility with existing systems while offering more limited on-chain utility. The regulatory distinction between permissionless and permissioned models will shape who can hold these assets and how they can be used across DeFi, collateralization and financing.

As wallets emerge as the central interface for both traditional securities and crypto-native assets, tokenization looks set to reshape market plumbing, expand trading hours to 24/7/365 and unlock new forms of yield generation—while also introducing novel operational risks around custody, compliance screening and smart contract design.