Tokenization

Tokenization transforms how assets are owned and traded. Real-world assets like real estate, art, commodities, private equity, and bonds can be represented as blockchain tokens, allowing them to be divided into smaller units, transferred instantly, and traded on secondary markets with lower costs and fewer intermediaries. A $10 million commercial building can be tokenized into 10,000 tokens worth $1,000 each, making institutional-grade real estate accessible to individual investors.

Financial institutions are leading tokenization adoption. BlackRock launched a tokenized money market fund. Major banks are tokenizing bonds, trade finance, and gold. The total value of tokenized real-world assets exceeded $50 billion by 2026, with projections for significant growth as regulatory frameworks mature. Tokenization can reduce settlement times from days to seconds, eliminate manual reconciliation, and enable automated compliance through smart contracts.

Tokenization differs from cryptocurrency in that each token represents a claim on an underlying real asset, not a native digital asset. The legal framework for tokenized assets is still developing, with key questions around investor protection, custody, and cross-border recognition. The most advanced tokenization markets are in private credit, US Treasuries, and real estate funds.