Tokenization Shifts from Crypto to Real-World Assets: Securitize
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
tokenizationreal-world-assets
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Giang Bui, Vice President and Head of Issuer Growth at digital asset securities firm Securitize, detailed a strategic pivot within the tokenization sector on a recent episode of "Bloomberg ETF IQ." Bui stated that the market's focus is decisively moving away from purely cryptographic assets toward the tokenization of traditional financial instruments. This evolution aims to improve efficiency and accessibility in private markets, which represent over $10 trillion in assets under management. The discussion, which included hosts Katie Greifeld, Scarlet Fu, and Eric Balchunas, highlighted a growing institutional demand for blockchain-based solutions that diversify beyond crypto-native volatility.
Tokenization, the process of representing ownership of an asset on a blockchain, initially gained prominence through cryptocurrencies and non-fungible tokens (NFTs). The failure of several high-profile crypto ventures in 2022, including the collapse of FTX, accelerated a search for less speculative use cases for distributed ledger technology. The current macroeconomic environment of elevated interest rates has simultaneously increased the cost of capital, making efficiency gains in capital formation and settlement critically valuable for large institutions.
The recent approval of spot Bitcoin ETFs in the United States has legitimized the underlying blockchain infrastructure while saturating the demand for pure-play crypto exposure. This regulatory milestone has created a clear pathway for established financial players to explore tokenization for assets they already understand, such as private equity funds and treasury bonds. The maturation of regulatory frameworks, including the EU's Markets in Crypto-Assets (MiCA) regulation, provides the legal certainty required for large-scale asset manager participation.
Private equity assets under management globally exceed $11.7 trillion, yet secondary market liquidity for these holdings remains exceptionally low. Boston Consulting Group projects the tokenized asset market could reach $16 trillion by 2030, representing a significant portion of illiquid global wealth. The value of tokenized U.S. Treasury products has grown from under $100 million in early 2023 to over $1.2 billion as of June 2026, demonstrating rapid adoption for a specific, yield-bearing asset class.
Securitize has facilitated over 1,000 distinct tokenized security offerings since its founding. A comparative analysis of settlement times reveals the efficiency gains: traditional private market transactions often require 30 to 60 days for settlement and administrative processing. Blockchain-based settlements for tokenized assets can be completed in minutes, reducing counterparty risk and operational overhead. This represents a potential cost reduction of 20-40% for asset servicers.
| Asset Class | Traditional Settlement Time | Tokenized Settlement Time |
|---|---|---|
| Private Equity | 30-60 days | Near-instantaneous |
| Fund Shares | 5-7 business days | Near-instantaneous |
The pivot toward real-world asset tokenization creates clear winners and losers across financial sectors. Traditional custodian banks and transfer agents, such as BNY Mellon and Computershare, face disintermediation risk as blockchain networks can perform their core record-keeping functions programmatically. Conversely, asset managers with large private market portfolios, like Blackstone and KKR, stand to benefit significantly from enhanced liquidity and new distribution channels for their products. Firms providing blockchain infrastructure to these incumbents, such as Securitize and Figure Technologies, are positioned for direct growth.
A counter-argument to this trend is the unresolved question of scalability and interoperability between different blockchain networks used for tokenization. Without common technical standards, the market could become fragmented, limiting the liquidity benefits tokenization promises. Despite this, institutional positioning is demonstrably shifting. Major investment banks, including JPMorgan and Goldman Sachs, have launched internal blockchain divisions focused exclusively on tokenizing traditional assets, signaling a long-term commitment to this technological shift. Capital flow is moving from speculative crypto ventures toward enterprise-grade blockchain solutions that serve existing financial products.
The primary catalyst for the sector will be the Securities and Exchange Commission's decision on potential spot Ethereum ETFs, expected by the third quarter of 2026. Approval would further validate the smart contract platforms that underpin most real-world asset tokenization projects. Market participants should monitor monthly on-chain data for U.S. Treasury tokenization volumes, with a break above $2 billion signaling accelerated institutional adoption. The performance of publicly traded asset managers with active tokenization initiatives will serve as a key sentiment indicator for the entire theme.
Key technical levels to watch include the total value locked (TVL) in real-world asset protocols on networks like Ethereum and Stellar, which currently sits at approximately $3.5 billion. A sustained move above $5 billion TVL would confirm a new growth phase. The evolution of regulatory guidance from the Financial Accounting Standards Board (FASB) on accounting for digital assets will be another critical development, with new standards anticipated in early 2027.
Retail investors may eventually gain access to investment opportunities traditionally reserved for institutions, such as private equity and venture capital funds, through fractional tokenized shares. This access is contingent on regulators approving these products for non-accredited investors, which is not yet the case. Initially, the primary beneficiaries are institutional players who can use tokenization to improve the operational efficiency of their existing portfolios. The direct impact on retail-focused platforms like Robinhood or Coinbase will be delayed until regulatory pathways for distribution are fully established.
The STO boom of 2018 was characterized by startups attempting to use tokenized securities as a novel fundraising mechanism, often for high-risk ventures. The current wave is fundamentally different, driven by established financial institutions tokenizing proven, revenue-generating assets like treasury bonds and private credit funds. The infrastructure is also more mature, with regulated transfer agents and compliance tools that were largely absent six years ago, reducing regulatory risk for participants.
The largest operational risks involve the legal enforceability of on-chain ownership rights and potential smart contract vulnerabilities. If a flaw in the code governing a tokenized private equity fund is exploited, investors could suffer irreparable loss. the reconciliation of on-chain ownership with off-chain legal frameworks remains a complex challenge that requires precise legal opinions for each jurisdiction. Cybersecurity threats targeting the digital wallets holding tokenized assets also present a persistent, high-severity risk that must be managed.
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