Real World Asset Tokenisation: What It Is and Why It Matters
Tokenising real-world assets puts property, bonds, and gold on the blockchain. Learn how RWA tokenisation works, which projects are leading, and what risks to u
Real World Asset (RWA) tokenisation is the process of representing ownership of a physical or traditional financial asset — property, government bonds, gold, private credit, art — as a token on a blockchain. In 2026, RWA tokenisation has grown from an experimental concept to a $12 billion market, with some of the world’s largest financial institutions actively building in the space.
What Can Be Tokenised?
US Treasury bills and bonds: The largest segment. Protocols including Ondo Finance, OpenTrade, and BlackRock’s BUIDL fund allow investors to hold tokenised short-term US government debt and earn the underlying yield. Total tokenised Treasury market has exceeded $2 billion.
Private credit: Centrifuge and Maple Finance allow businesses to access loans funded by on-chain capital. Lenders provide stablecoins; borrowers (real-world businesses) receive capital and pay interest. Over $400 million in active loans have been processed through these platforms.
Commodities: Gold, oil, and agricultural commodities can be tokenised. PAX Gold (PAXG) and Tether Gold (XAUT) both represent 1 troy ounce of physical gold per token, held in secure vaults. Holders get the inflation hedge properties of gold with the transferability of crypto.
Property: Fractional real estate tokenisation allows investors to buy shares of rental properties. UK-based platforms including Brickblock and international platforms like RealT offer fractional property ownership. Liquidity is still limited compared to other RWA categories.
Equities and funds: Some jurisdictions allow tokenised securities — shares in companies or investment funds represented as blockchain tokens. Singapore and Liechtenstein have established regulatory frameworks for these instruments.
Why Tokenise Assets?
Tokenisation solves genuine problems in traditional finance. Fractionalisation: a £500,000 property can be divided into 500,000 tokens of £1 each, accessible to retail investors who could never buy the whole asset. Settlement speed: tokenised assets can settle in seconds rather than the 2-day standard (T+2) of traditional markets. 24/7 trading: tokenised assets trade around the clock, seven days a week. Programmability: smart contracts can automatically distribute dividends, enforce transfer restrictions, or execute complex yield strategies.
Institutional Involvement
BlackRock’s BUIDL fund — a tokenised money market fund on Ethereum — crossed $500 million in assets under management within months of launch in 2024. Franklin Templeton operates an on-chain money market fund (FOBXX) on Stellar. JP Morgan runs its own permissioned blockchain (Onyx) for tokenised repo transactions worth billions daily.
These are not peripheral experiments. Major financial institutions are building production infrastructure for tokenised assets because the operational efficiencies are real and measurable.
Risks of RWA Investments
Legal risk: a token representing property ownership is only as good as the legal framework enforcing the underlying claim. If the issuer goes bankrupt, the legal process for token holders to recover the underlying asset is untested in most jurisdictions.
Counterparty risk: most RWA tokens require trusting a centralised issuer to maintain the underlying asset. This reintroduces the counterparty risk that DeFi was designed to eliminate.
Liquidity risk: secondary markets for tokenised real estate or private credit are still thin. Selling quickly may require accepting significant discounts.
Regulatory risk: tokenised securities face overlapping regulatory frameworks. The legal status of specific RWA tokens varies significantly between the UK, EU, and US.
What This Means for UK Investors
Tokenised US Treasury bills are currently the most accessible and lowest-risk RWA category for UK-based investors. They offer dollar-denominated yield (currently 4–5% on short-term Treasuries) with the settlement efficiency of crypto. PAXG and XAUT offer gold exposure with crypto-native transferability.
More complex RWA products — private credit, fractional property — carry significant additional risks and should be approached with thorough due diligence.
This article is for educational purposes only and does not constitute financial advice. Always do your own research.
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