What is Tokenization and Which Assets Can Be Tokenized In 2025

Asset tokenization is transforming the financial world, turning illiquid assets into tradable digital tokens that promise to revolutionize investment and ownership.

TLDR Asset tokenization has reached $24 billion by mid-2025 (380% growth since 2022), with projections of $50 billion by year-end. Major institutions now implement tokenization across real estate, private credit, commodities, and stocks. Benefits include fractional ownership, automated processes, and blockchain transparency, while challenges involve regulatory uncertainty and technical vulnerabilities. Long-term forecasts range from $2-30 trillion by 2030-2034 as tokenization expands to green assets, Islamic finance, private equity, and intellectual property.RetryClaude can make mistakes. Please double-check responses.

Although asset tokenization has been a theoretical concept for years, its practical application has surged in the last 12–18 months. With blockchain and smart contracts now mature, tokenized real-world assets (RWAs) have grown from niche pilots into multi-billion dollar markets, attracting serious institutional attention.

What is Asset Tokenization?

Asset tokenization transforms a tangible or intangible asset into a digital token hosted on blockchain. These tokens—known as security tokens—digitally represent fractional ownership, governance rights, or economic benefits tied to the underlying asset. Once on-chain, tokens can be traded via decentralized platforms, with ownership recorded transparently and immutably.

This introduces a new form of “programmable finance” where rights like dividends, rental income, or coupon payments can be automated through smart contracts. Unlike utility tokens, security tokens confer legal claims on assets, enforced under securities law.

The Tokenization Boom in 2025

Numbers speak volumes:

• The tokenized RWA market hit approximately $24 billion by June 2025, a 380% growth since 2022.

• CoinGeek projects it could reach $50 billion by end 2025, driven by private credit and tokenized U.S. Treasuries.

• Market forecasts vary widely: McKinsey estimates $2–4 trillion by 2030, BCG *et al.* up to $16 trillion, and Standard Chartered forecasts $30 trillion by 2034.

• Ethereum remains dominant—holding around $7.5 billion in tokenized RWAs—while Solana, Aptos, Avalanche, and XRP Ledger are gaining traction.

What Assets Are Being Tokenized in 2025?

• Real Estate: From Dubai villas to Aspen resorts—pryPco sold a tokenized villa in under 5 minutes.

• Private Credit and Bonds: The largest category of tokenized RWAs—private credit has reached ~$14 billion.

• Commodities and Agriculture: Tether’s acquisition of Adecoagro for ~$600 million integrates USDT in commodity supply chains via blockchain payments.

• Art, Carbon Credits and Private Equity: Platforms like Smartlands tokenize farmland, carbon credits; Securitize has issued over $4 billion in tokenized equity and funds, including BlackRock’s BUIDL fund and Apollo’s ACRED private credit fund.

• Stocks and ETFs: Robinhood launched tokenized U.S. stocks and ETFs for its EU customers—over 200 assets—as “contracts for value,” but without shareholder rights.

Core Drivers and Infrastructure Maturing

The tokenization landscape is experiencing rapid maturation across multiple fronts. Institutional adoption has reached a critical inflection point, with financial giants like BlackRock, Apollo, JPMorgan, and Goldman Sachs no longer just exploring but actively launching tokenized funds and credit products. This shift from experimentation to implementation signals a fundamental change in how traditional finance views blockchain technology.

Regulatory clarity is emerging globally as jurisdictions compete to become tokenization hubs. The UAE, UK, Hong Kong, Australia, and India have moved beyond mere discussion, actively implementing legislative frameworks for Security Token Offerings (STOs) and piloting Central Bank Digital Currency (CBDC) initiatives. These regulatory sandboxes provide the legal certainty institutions require to deploy capital at scale.

The technical infrastructure connecting traditional assets to decentralized finance has evolved significantly. Protocols such as Ethena, Maple, and Centrifuge, alongside frameworks like RedStone and RWA.xyz, now enable sophisticated tokenized instruments including bonds, derivatives, and lending products. This integration bridges Real World Assets (RWAs) with DeFi's deep liquidity pools, creating new opportunities for yield and capital efficiency.

Underpinning this entire ecosystem, stablecoins have surged past $210 billion in market capitalization. This growth is accelerating through regulatory developments like the GENIUS Act establishing U.S. stablecoin licensing standards, while international frameworks such as the EU's MiCA regulations and Australia's evolving policies provide additional momentum for adoption.

Advantages—and Risks—of Asset Tokenization

The Promise of Tokenization

Asset tokenization fundamentally transforms how you can interact with investments. Through fractional ownership, you're no longer locked out of high-value assets—whether that's commercial real estate in Manhattan or fine art worth millions. This technology democratizes access, allowing you to invest in prime markets regardless of your location or net worth, breaking down barriers that have existed for generations.

The efficiency gains are equally compelling. Smart contracts automate everything from settlement processes to dividend distributions and compliance checks, removing layers of intermediaries that traditionally slow transactions and add costs. Every transaction gets recorded on an immutable blockchain ledger, giving you unprecedented transparency into your investments. When tokenization follows Security Token Offering (STO) frameworks and securities laws, you gain additional regulatory protection that enhances trust in these digital assets.

The Reality Check

However, you need to understand the significant risks before diving in. Regulatory clarity remains elusive—owning a stock token doesn't necessarily mean you own actual shares in a company. The SEC and courts continue grappling with how to protect investors while fostering innovation, leaving you in a gray area where rules can shift unexpectedly.

Cross-border complications add another layer of complexity. If you purchase a tokenized asset tied to multiple jurisdictions, enforcing your rights becomes a legal maze. Technical vulnerabilities present ongoing concerns as well—oracle failures, custody protocol breaches, and bridge exploits could compromise your holdings despite blockchain's security promises.

Perhaps most concerning is the potential for misrepresentation. Synthetic or derivative tokens might give you the impression you own underlying assets when you actually hold something quite different. This opacity in certain corners of the tokenization market demands extra vigilance on your part to verify exactly what you're purchasing.

The Road Ahead: 2025 Onward

The tokenization revolution is just beginning. Conservative estimates place the tokenized market at $2–6 trillion by 2030, but if adoption accelerates as many expect, you could be looking at a $30 trillion market by 2034. These aren't just speculative numbers—they reflect the fundamental shift happening as traditional assets migrate onto blockchain rails.

You'll witness tokenization expanding far beyond traditional securities. Green assets and carbon credits will become tradeable tokens, allowing you to participate in the environmental markets previously reserved for corporations. Islamic finance, with its $4 trillion in assets, is embracing Sharia-compliant tokenization structures. Private equity, historically accessible only to the ultra-wealthy, will open its doors through fractionalized tokens. Even intellectual property—patents, royalties, trademarks—will transform into liquid, tradeable assets supported by AI-driven compliance systems that ensure regulatory adherence.

The infrastructure supporting this expansion continues to evolve rapidly. DeFi protocols will integrate more deeply with tokenized assets, while Central Bank Digital Currencies provide the settlement layer for institutional transactions. Cross-chain standards will enable seamless movement of tokens across different blockchains, creating truly global, interoperable markets where you can trade 24/7 without traditional market hours or geographic restrictions.

Success hinges on regulatory convergence. As governments worldwide harmonize their approaches to stablecoins, Security Token Offerings, and digital asset rights, you'll see the friction that currently hampers adoption disappear. This regulatory clarity won't just protect you as an investor—it will unlock institutional capital waiting on the sidelines, accelerating the transformation of how humanity owns, trades, and values assets.

Bottom Line

By mid 2025, asset tokenization has matured into a rapidly expanding multi billion-dollar infrastructure across real estate, credit, commodities, equity, and more. Institutional momentum, technological maturity, and evolving regulations are aligning to unlock new liquidity, efficiency, and market access. Yet, ensuring that on-chain tokens reflect off-chain rights, securing bridges between assets, and syncing global regulations are essential next steps. If navigated well, asset tokenization might transform how we trade, own, and finance the next generation of assets.