The tokenized Real World Assets (RWA) market exceeded $10 billion, fueled by institutional interest and the convergence of traditional (TradFi) and decentralized finance (DeFi). This market segment has grown by over $2 billion since the beginning of the year.
Proponents argue that tokenized RWAs offer multiple advantages, such as enhanced liquidity, simplified asset transfers, and improved regulatory compliance via smart contracts. They also allow for better portfolio diversification and access to a broader range of investment opportunities.
Data from OurNetwork reveals that the tokenized RWA market now stands at $10.9 billion. The private credit market accounts for $8.1 billion, while tokenized treasuries contribute $1.9 billion. The rest comprises smaller asset classes.
This growth is evident in the tokenized US Treasury market, which ballooned from $726.23 million to $1.94 billion in 2024. High-demand sectors include private loans and US Treasury debt.
Institutional involvement continues to deepen, as demonstrated by BlackRock’s BUIDL fund, which launched in March. With rising dividend yields, it highlights the growing interest in tokenized money market funds among institutional investors.
Other notable participants include Franklin Templeton and Grayscale, offering tokenized RWA funds across multiple platforms like Arbitrum and Avalanche. Goldman Sachs and State Street are also exploring tokenization projects, revealing a trend toward integrating TradFi with DeFi.
Ondo Finance (ONDO) emerges as a pivotal player in the tokenized U.S. Treasuries sector, with over $536 million in total value locked (TVL). Ondo’s yield-bearing stablecoin, USDY, is supported on various blockchains, enhancing its scope and liquidity.
This rapid expansion comes as institutions increasingly invest in cryptocurrencies, further driven by the approval of Bitcoin and Ethereum ETFs. Tokenizing RWAs not only addresses the needs of institutional clients but also provides safer operational alternatives compared to conventional exchanges or wallet providers.
However, challenges like establishing token legitimacy, legal acceptance, and securing smart contracts remain hurdles to mainstream adoption.
