1. Real-World Assets: What They Are and Why They're Changing Finance
In March 2024, BlackRock launched BUIDL, a tokenized US Treasury fund, on Ethereum through Securitize. By early 2026 the fund held roughly $2.4 billion across multiple public blockchains, and Binance began accepting BUIDL as off-exchange trading collateral 1. JPMorgan's Kinexys platform has processed more than $3 trillion cumulatively and averaged above $7 billion a day in late 2025 2. Non-stablecoin tokenized real-world assets on public chains now sit at roughly $24 to $28 billion. Once fiat-backed stablecoins are counted, the figure passes $300 billion 3.
The list extends beyond those two names. Franklin Templeton's OnChain U.S. Government Money Fund, traded under BENJI, records share ownership directly on public chains and is accessible to retail subscribers. Apollo's tokenized private credit product, ACRED, is already in use as collateral inside permissioned DeFi venues. These are three distinct product shapes (a money market fund, a bank payment rail, and a private credit instrument), all sitting on the same underlying pattern: an off-chain claim held under a legal wrapper, represented by a token on a shared ledger.
These are not pilots written up in slide decks. They are regulated products carrying live balance sheets.
Five years ago, a paper on tokenized real-world assets would have been describing an idea. This paper describes a working market.
The category outran its vocabulary along the way. "Real-world asset" is now used loosely enough to cover tokenized Treasury bills, governance tokens, algorithmic stablecoins, and speculative tokens with a real-world narrative attached. The distinction between them matters. A tokenized Treasury held under a regulated custodian is not the same instrument as a governance token marketed as "backed by" something, and reading the two as variants of one category produces bad decisions. Much of the sloppiness is honest confusion. Some of it is not. Without a working definition, the reader has to evaluate each pitch on the strength of its vocabulary. This paper uses a strict definition, applied uniformly, so the same test works on every token the reader meets.
Section 1 sets the foundations for the rest of the paper: a working definition of a real-world asset, a view of which products now exist and at what scale, the reasons the current window is different from earlier cycles, and the audiences this paper is written for.
What Has Changed in Real-World Asset Tokenization Since 2019
The previous attempt at tokenized real-world assets, the 2017 to 2019 security token cycle, failed for four concrete reasons: legal ambiguity, absent institutional buyers, thin technical infrastructure, and shallow on-chain liquidity. All four gaps have closed, in the same jurisdictions, within roughly two years of each other.
| Dimension | 2017 to 2019 | 2024 to 2026 |
|---|---|---|
| Regulation | Ambiguous status of tokenized securities in most major jurisdictions | Operational frameworks in the EU (DLT Pilot Regime from 23 March 2023, MiCA from 30 December 2024), UK, Switzerland, US, Singapore, and Hong Kong4 |
| Institutional demand | Crypto-native startups leading, most institutions on the sidelines | BlackRock, JPMorgan, Franklin Templeton, Apollo, DTC, and NYSE building on-chain products and pilots |
| Settlement pressure | T+2 was normal; post-trade costs were tolerable | US at T+1 since 28 May 2024; the EU, UK, and Switzerland moving to T+1 on 11 October 2027 5 |
| Technical stack | Crypto-native custody, nascent issuance platforms, thin DeFi liquidity | Bank-grade custody, regulated transfer agents, permissioned DeFi rails, and tokenized deposits |
Institutional interest tracks the infrastructure. In the 2026 EY-Parthenon and Coinbase institutional investor survey, 63% of institutions described themselves as "very interested" in tokenized assets, up from 57% a year earlier 6. That is not a crypto-native audience. These are strategy teams, risk officers, legal departments, and operations leads, all arriving at the same topic at the same time. That is why this paper speaks to all of them.
A note on approach before the subsections. This paper is written to be read the way institutional research is read. Where a figure is used, it carries a source and a date. Where a trajectory is real, it is described as real. Where a claim is still a forecast, it is named as one. The paper takes no position on which chains, issuers, or protocols the reader should adopt, and it does not recommend any. Its job is to describe a market that now exists, set out the mechanics that make it work, and give the reader enough structure to form an independent view. Product pitches and consulting framing belong in other channels.
What This Section Covers
1.1 From Physical to Digital: The Tokenization Moment traces the historical arc from paper stock certificates through the DTC's electronic book-entry system to blockchain tokenization. The point is not nostalgia: every prior change in how ownership is recorded came from a crisis the existing infrastructure could not absorb, and the institutions that built the current system are now the ones extending it onto shared ledgers.
1.2 What Are Real-World Assets? gives a precise working definition and draws a clean boundary around the category. A real-world asset is a dual structure: a token on a public or permissioned ledger plus an off-chain asset held under a legal wrapper that gives the token its value. The subsection walks through what counts (tokenized Treasuries, tokenized private credit, and tokenized gold) and what does not (Bitcoin, most governance tokens, and pure algorithmic stablecoins).
1.3 Why Real-World Assets Matter Now develops the four-gap argument in full, showing how regulation, institutional demand, settlement pressure, and the technical stack each shifted in the same direction within a short window. It explains why the current wave is not a louder version of the last one, and what that means for anyone deciding whether to act now or wait.
1.4 Who This Paper Is For names the five audiences the paper serves and maps each to a short reading path through the remaining sections. It also sets limits: this paper is not investment advice, a protocol specification, or a jurisdiction-specific legal opinion.