Tokenizing Real-World Assets: A Financial Revolution or Reinforcement of the Status Quo?

The tokenization of real-world assets (RWAs) is reshaping finance, offering fractional ownership of high-value assets like real estate, bonds, and commodities. This innovation claims to democratize access to wealth, but does it truly shift financial power—or simply reinforce existing hierarchies under a digital framework?

With BlackRock’s tokenized mutual fund reaching $637 million and Franklin Templeton expanding its blockchain-based money fund to Solana, the space is growing rapidly. But the key question remains: Who benefits the most?

The Promise of Tokenized RWAs

Tokenization converts physical assets into blockchain-based digital tokens, allowing broader investor participation through fractional ownership. This means:

• Lower investment barriers—investors can buy a portion of an asset instead of the whole.

• Enhanced liquidity—traditionally illiquid assets (real estate, private equity) can be traded more easily.

• Faster transactions—blockchain removes intermediaries, reducing costs and settlement times.

Platforms like Lofty and RealT already allow small investors to own fractional shares of real estate, making asset ownership more accessible. If successful, this shift could bridge wealth gaps and expand investment opportunities to a wider demographic.

However, does tokenization truly break down financial barriers, or does it just repackage them?

Institutional Control: New Tech, Same Gatekeepers?

While tokenization is marketed as democratizing wealth, most tokenized RWAs are still controlled by traditional institutions like banks, asset managers, and investment funds. This means:

• Retail investors gain access, but institutions set the rules—pricing, liquidity, and governance remain centralized.

• Custodial control is still required—off-chain entities store and verify the underlying assets, introducing counterparty risk.

• Permissioned blockchains dominate—institutions prefer private networks with compliance controls, limiting decentralization.

In short, small investors may participate, but they don’t necessarily influence financial decision-making. The risk is that tokenization becomes just another tool for institutions to expand their capital base without fundamentally changing wealth distribution.

Regulatory Challenges and Market Liquidity

Even if tokenization offers accessibility, global regulations remain unclear. The challenges include:

• Jurisdictional inconsistencies—different countries classify tokenized assets in conflicting ways, making compliance difficult.

• High operational costs—meeting regulatory requirements can limit DeFi-based alternatives, reinforcing institutional dominance.

• Liquidity uncertainty—while tokenization claims to make assets more liquid, secondary markets are still developing, and retail investors may struggle to exit positions.

If regulators favor institution-backed tokenization models, decentralized finance (DeFi) alternatives could be sidelined, making truly decentralized asset ownership difficult to achieve.

The Future: Disruption or Evolution?

The long-term impact of RWA tokenization depends on several factors:

• Institutional vs. DeFi balance—Will decentralized models emerge, or will institutions control the space?

• Regulatory clarity—Will governments allow permissionless access, or will compliance hurdles limit retail participation?

• Market adoption—Will retail investors trust tokenized assets, and will secondary markets support liquidity?

If tokenization remains institutionally controlled, it may improve market efficiency but not fundamentally change financial accessibility. However, if decentralized models succeed, a new era of global asset ownership could emerge.

The question is: Will tokenization truly open doors—or just reinforce existing financial power structures?

Reply and share your thoughts.

Enjoyed this breakdown? Subscribe for more insights on blockchain, DeFi, and the future of finance.

Works Cited

"BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network." Business Wire, March 20, 2024. https://www.businesswire.com/news/home/20240320771318/en/BlackRock-Launches-Its-First-Tokenized-Fund-BUIDL-on-the-Ethereum-Network

"Franklin Templeton Expands $594M Market Money Fund to Solana." CoinDesk, February 12, 2025. https://www.coindesk.com/business/2025/02/12/franklin-templeton-expands-usd594m-market-money-fund-to-solana

"The Growth of RWA Tokenization." Duane Morris Blogs, December 3, 2024. https://blogs.duanemorris.com/fintech/2024/12/03/the-growth-of-rwa-tokenization

Federal Reserve RWA Tokenization: The Intersection of Central Banking and Blockchain. LinkedIn, 2024. Retrieved from https://www.linkedin.com/pulse/federal-reserve-rwa-tokenization-linkpool/

"Abu Dhabi Firm to Launch Tokenized US Treasuries Fund." Reuters, October 31, 2024. https://www.reuters.com/technology/abu-dhabi-firm-launch-tokenized-us-treasuries-fund-2024-10-31