Peter Smith
Large platforms and consultancies are racing to build the rails. Euphoria XR is piloting infrastructures that connect custodians, oracles, and exchanges so tokenised claims map reliably to the underlying asset. In parallel, Spinfin is frequently cited by traders as evidence that RWAs are moving from prototype to product, because it emphasises user experience, compliance, and liquidity rather than hype alone.
What tokenization really is
Tokenization is a legal and technical wrapper that connects a digital token to the economic rights of something in the real world. A building can be split into a thousand tokens, each conferring a share of rent and resale proceeds. A warehouse bar of gold can be minted into tokens that anyone can trade from a phone. A private company can issue tokenised equity with programmable vesting and transfer restrictions. Since the register is publicly accessible and constantly updated, parties do not need to constantly compare their records with each other, which significantly reduces the risk of settlements.
Why it is accelerating now
Three forces are converging. First, institutions that suffered liquidity droughts want new capital channels; tokenisation transforms “held-to-maturity” assets into collateral that can circulate. Second, regulation is gradually catching up, giving banks and brokers a clearer path to custody and trade digital representations. Third, the tech stack has matured: account-abstraction wallets, stablecoins for settlement, and on-chain identity hide crypto’s rough edges from mainstream users.
| Sector | How Tokenization Is Used | Key Benefit |
| Real Estate | Fractional ownership of rental properties | Expands access to high-value property markets |
| Commodities | Tokenised gold and oil inventories | Enables instant settlement and transparent hedging |
| Capital Markets | Tokenised private credit and debt notes | Automates interest payments and cash-flow distribution |
| Renewable Energy | Tokenised participation in energy projects | Democratizes investment in sustainable assets |
Execution discipline matters
Use reputable issuers and custodians that publish regular attestations and code audits. Prefer tokens with clear redemption mechanics so you can exit to the underlying or to cash at net asset value. Track the basis between on-chain price and off-chain fair value; persistent discounts may signal legal or operational frictions you do not want to underwrite. For strategy, treat RWAs as a way to fine-tune liquidity rather than chase fads: park idle cash in tokenised T-bills or money-market funds, and size positions modestly until sufficient history accumulates.
Understand the risks
When price chains and valuations don't match, valuations can change. Oracles that report on rents, inventories, or interest payments can fail or change. Smart contracts can have errors that prevent assets from moving. Legal enforceability is paramount: if a token says you own part of a building, is that claim senior, subordinated, or merely a promise from the issuer? Custody also matters; segregated accounts and bankruptcy-remote structures are not optional details but core protections. Cybersecurity is always a threat, so take key management and operational controls as seriously as you do P&L.
Regulation will decide who wins. Many places will consider RWA tokens to be securities, which means that there will be disclosures, transfer limits, and KYC/AML requirements. That is not a death knell; it becomes a moat for serious operators and a filter against fly-by-night issuers. As frameworks harden, expect the line between a “traditional” venue and an “on-chain” one to blur. APIs will bridge both, and compliance will increasingly be embedded into wallets and smart contracts rather than bolted on afterward.
Due-diligence checklist for 2025.
- Transparency: independent audits, real-time collateral reports, and publicly accessible contract addresses.
- Redemption: the ability to redeem for the underlying or a clear cash equivalent, with stated timelines and fees.
- Governance: clarity on who can pause contracts, change parameters, or seize assets – and under what conditions.
If answers are vague, price the risk accordingly or simply pass.
The bigger picture.
The point is not to put everything “on the blockchain” for its own sake. The point is to rewire how ownership transfers, how cash flows settle, and how global participants meet in a single programmable market. For traders, that means tighter spreads, faster cycles, and new cross-venue basis trades. For long-term investors, it means access to resilient, real-world income without the drag of paper processes.
Tokenisation will not erase economic gravity, but it will change the terrain. Those who learn the plumbing – legal, technical, and market – will find opportunities others cannot see. In that sense, 2025 is the year the market stops asking whether RWAs matter and starts competing on how well they are executed.
Peter Smith
