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Friday, January 26, 2024

Expert Insights #1: The Trajectory of RWA Tokenization

Expert Insights: The Trajectory of RWA Tokenization title with Particula, LandX, RWA Finance and TASSETS partner logos

Blockchain as a new financial infrastructure - it’s a vision shared by a number of experts, including Larry Fink, the CEO of BlackRock. The variety of assets that can be brought onchain is growing with each new use case; from financial assets, to commodities and collectables. Each model aims to solve different problems, whether it’s liquidity, accessibility or lack of additional utilities.

To understand how this innovative form of asset holding will evolve, we asked experts’ opinions on its potential impact, challenges, and future prospects in the rapidly changing landscape of the financial industry.

How do you envision the future trajectory of the tokenization industry? question

Nadine Wilke, Co-founder at Particula:

The future of this industry looks bright and dynamic. As blockchain technology becomes more common, we'll likely see more types of assets, like real estate, carbon certificates, and financial instruments, being brought onchain. This growth hinges a lot on how regulations evolve, so more understanding and supportive laws could really boost the industry. Technological advancements in blockchain, like better scalability and security, are set to make the process more efficient and widely accessible.

Right now, we see things like gold, fixed income, and real estate being tokenized, but soon we could see a wider range, including intellectual property and personal assets. There's also a trend towards merging onchain assets assets with traditional finance, which might make them more mainstream. As investors get more familiar with them, demand and innovation in this sector could surge.

Global economic and political situations also play a role in how quickly and widely these assets are adopted. So in summary, while it's hard to say for sure if all assets will end up on the blockchain, the movement towards more tokenization is quite clear, depending on tech advancements, laws, market acceptance, and global economic conditions.

Prasanth, CEO and Founder of TASSETS:

Looking ahead, I'm really excited about what's coming up. From around the middle of 2024, things are really going to take off. We've got big names like Larry Fink from Blackrock and Jamie Dimon at JPMorgan Chase, not to mention the big four consulting firms and major players in the banking and financial sectors, all getting ready for this big shift. It feels like we're on the cusp of something huge. 2024 is the year when significant developments are expected to begin, but my bet is on 2026 – that's when I think we'll see the majority of assets being on-chain, especially in major markets like the US, UK, Europe, and parts of Asia and the UAE.. It's a bit of a bold prediction, but I'm convinced that eventually we're going to see every asset out there represented on the blockchain. It's just the way things are moving.

Youssra, Business Development at RWA Finance:

The future of tokenization is headed towards substantial growth, with a number of traditional asset classes finding representation on the blockchain useful.

We already see increased liquidity and accessibility, giving more investment opportunities. Regulatory frameworks will likely adapt, creating a mutual environment for the mainstream adoption of tokenized assets.

The integration of this new form of representation with the decentralized finance ecosystem is a key trend right now. RWA Finance aims to contribute significantly to this integration, by providing new possibilities for bridging traditional finance with blockchain-based financial products.

Projects like RWA Finance and Cogito are at the forefront, while actively contributing to the trend. While the idea of all assets finding representation on the blockchain is compelling, we should look at it as an evolving journey. RWA Finance, Cogito, along with other pioneering projects, will be building the infrastructure and fostering the ecosystem necessary for broader asset representation, as well as towards universal asset tokenization.

d_K, Growth at LandX:

The future trajectory of this industry is very promising, mostly driven by the growing adoption of blockchain technology and its potential to rethink traditional financial systems. While it is challenging to predict with certainty, there is a strong possibility that a diverse range of assets will find representation onchain in the coming years. This new technology offers advantages such as increased liquidity, fractional ownership, transparency, and programmability, which can reshape how we perceive and interact with various forms of value. However, regulatory developments, technological advancements, and market acceptance will play crucial roles in this industry's evolution.

What stands out as the most compelling advantages of different tokenized assets? question

Nadine Wilke, Co-founder at Particula:

They stand out in the alternative investment realm, offering several compelling benefits. Enhanced data transparency, for instance, allows for real-time tracking of an asset's environmental impact, enabling more informed and responsible investing. The efficiency of blockchain technology streamlines transactions, making them quicker and more reliable. Smart contracts play a crucial role here, simplifying and automating complex administrative processes. This technological advancement opens access to previously unreachable markets and assets, like unique collectibles or international real estate.

Tokenization also democratizes investment by allowing fractional ownership, making it accessible to a wider audience. The most significant impacts of these advantages are likely to be seen in alternative asset classes, where traditional financial systems have limitations that this innovative technology can overcome.

Prasanth, CEO and Founder at TASSETS:

The primary advantages include programmable assets, programmable money, and programmable transactions which offer transparency, immutability, security, trustworthiness, and a seamless digital experience. Additionally, there's the benefit of increased liquidity. The significant asset classes where these advantages will be most prominent include liquid assets such as treasury bills and bonds, semi-liquid assets like funds, supply chain invoices, debt, and equity structures, and illiquid assets such as real estate. Key sectors are expected to be energy, banking, tokenized deposits, central bank digital currencies (CBDCs), real estate, and healthcare, particularly for cross-border transactions.

Youssra, Business Development at RWA Finance:

Onchain assets offer advantages such as enhanced liquidity and accessibility. The ability to introduce fractional ownership or enable 24/7 trading has a direct impact on the market liquidity. Additionally, overlooking geographical barriers provides global accessibility, allowing a broader range of investors to participate in different asset classes - depending on the regulations.

Efficiency and security are also benefits that can’t be overlooked. The use of blockchain technology simplifies traditionally manual processes and can reduce administrative burdens. At the same time, blockchain ensures transparency and traceability, improving overall security and mitigating fraud risks.

On the other hand, the embedded programmability is a game-changer, as automated dividend distributions or voting mechanisms add a layer of automation and efficiency to the investment landscape.

d_K, Growth at LandX:

Tokenized assets present attractive advantages across multiple asset classes, but it all boils down to different investor sectors and their needs. Agricultural commodities, for instance, will benefit from increased liquidity and accessibility through various DeFi primitives and lower entry costs. Similarly, securities and traditional financial instruments can take advantage of the blockchain technology to streamline processes, reduce costs, or even improve transparency.

NFTs have gained market dominance in the digital art and entertainment sectors, by offering new revenue streams for creators and greater ownership flexibility for consumers. While the benefits vary across asset classes, the most significant advantages often involve improved liquidity, reduced friction in transactions, and increased accessibility to a broader range of investors. Still, challenges such as regulatory compliance, standardization, and market education must be addressed in order to ensure mainstream adoption and sustained growth.


In conclusion, industry experts foresee a promising future for tokenization, anticipating widespread adoption across various asset classes. Liquidity, accessibility, efficiency, programmability - the list of benefits both institutional and individual investors stand to gain is extensive.

Overall, the tokenization of RWAs is not just a trend but a fundamental shift with the potential to redefine investment strategies. As the financial landscape evolves, investors need to adopt a proactive approach to integrate these innovative assets and stay ahead in this era of transformative global market shifts.

  • Expert Insights Series
  • Tokenization