Tokenized Real World Assets (RWA): Where are they now?

There is nothing in the world that is more scrutinized than money. How could it not be when money relays information on the value of…everything? And all economic activity arises from that record-keeping, if it is conducted accurately.

When Bitcoin launched in 2009, it opened a new door, a new perspective on how that information is managed and transferred. Or, more precisely, blockchain technology did. While Satoshi Nakamoto envisioned Bitcoin as self-contained and sovereign even from governments and central banks, blockchain is a neutral tool.

One that can spur another FinTech wave – tokenization of real-world assets (RWAs). These types of tokens have all the hallmarks of blockchain assets – transparency, efficiency and self-custody – backed by real-world assets.

Internet > Blockchain > Tokenization

Blockchain technology was critical in establishing the trust needed for Bitcoin to evolve into a digital asset worth half a trillion dollars. By leveraging cryptography with chained data blocks, wherein each new block is dependent on the previous one, Bitcoin is the pioneering proof-of-concept that digital records can be made immutable.

And if real-world value can be brought into the digital world securely, we are at the doorstep of a new era. The era of the tokenization of real-world assets (RWAs). If something is legally definable as an asset, that logic can be tokenized into a tradable asset. For this reason, the RWA scope is limitless, ranging from real estate, art and securities to debt instruments, luxury goods and fund-raising equities.

RWA tokenization is groundbreaking in that it opens 24/7 trading doors to a global market, previously reserved for exclusive institutions. On top of that, even non-fungible assets like machinery or commodities could be made fungible with fractional ownership. Above all else, RWA tokenization reduces the friction of capital flows by removing, or drastically reducing, intermediaries.

Yet, regarding something as important as value, “groundbreaking” innovation often takes a back seat to caution. Moreover, it is unclear that intermediaries could be removed in all instances, which would mute the entire point of tokenized RWAs. With that in mind, how do we view the current state of RWA tokenization and its future?