Tokenized RWAs: Where Demand Is Real, and Where It Isn’t

For much of the past few years, real-world asset (RWA) tokenization has been discussed as a technological certainty. Put assets onchain, reduce friction, unlock trillions. The narrative has been compelling, but also incomplete.

The more interesting question today is no longer whether tokenization will happen. It already is. The harder and more useful question is where genuine economic demand actually exists, and where tokenization is simply a solution in search of a problem.

Answering that requires moving past headlines and instead looking at who is pulling tokenized assets into real workflows, why they are doing so, and what that tells us about the future shape of tokenized markets.

From Experiment to Reality

Institutional adoption of tokenized RWAs is now sufficiently established that it has moved from being a question to being a given. Over the past two years, on-chain RWAs have grown from low single-digit billions to tens of billions of dollars, with tokenized US Treasuries and private credit accounting for the majority of that growth. BlackRock, Franklin Templeton, JP Morgan, Apollo, and others are no longer experimenting with tokenization; they are issuing, holding, and using tokenized instruments.

These institutions are not tokenizing exotic or speculative assets. They are starting with the most conservative building blocks in global finance: government debt, money market funds, and short-duration credit. That choice alone tells us something important. Early adoption is driven by practical incentives, not ideological beliefs.

Which leads to the question: what are those incentives, really?

Tokenization as Financial Plumbing, Not Market Revolution

Tokenization does not create new assets. It changes how existing assets move.

At a structural level, what blockchains offer is coordination. Shared ledgers, programmable settlement, and the ability for assets to move continuously rather than restricted to market hours. Whether this happens on public chains or permissioned networks matters less than the underlying economic shift: capital can be mobilized faster, reused more efficiently, and integrated into more workflows.

That distinction matters because it reframes tokenization away from retail-facing narratives and toward balance sheets, collateral flows, and treasury operations. In other words, tokenization is not primarily about access. It is about efficiency. And efficiency is where real demand starts to surface.

Where Real Demand is Emerging

If we look past the language of “adoption” and focus instead on who is buying, holding, and integrating tokenized RWAs, several clear trends emerge.

1 . Yield is the Entry Point

The strongest demand signal in tokenized RWAs today is yield.

Tokenized US Treasuries have grown faster than any other RWA category, not because they are novel, but because they combine three things markets consistently want: safety, yield, and liquidity. In a higher-rate environment, Treasuries yielding 4–5% have become economically meaningful again. Tokenization simply makes them more usable across borders and systems.

This demand extends beyond crypto-native investors chasing returns. Stablecoin issuers, exchanges, and DeFi protocols are allocating to tokenized Treasuries to earn yield on idle reserves. Corporate treasuries and funds are exploring similar structures to hold short-term cash more efficiently. This has led to Treasuries-backed stablecoins now being used as off-exchange collateral, allowing institutions to earn low-risk yield while those assets continue to support trading, margin, and liquidity needs. 

The important insight here is that tokenization is being pulled into existing demand for yield, not creating that demand. When rates eventually fall, this category may compress, but the workflow improvements from tokenization are likely to remain.

2. Balance Sheet Efficiency

Perhaps, one of the least discussed but most structural sources of demand for tokenized RWAs comes from balance-sheet optimization.

Institutions care deeply about:

• How collateral is posted and reused
• How margin requirements are met
• How can idle capital be minimized
• How settlement risk ties up liquidity

Tokenized assets can function as programmable collateral, enabling faster settlement, intraday reuse, and clearer ownership tracking. This is why banks and exchanges have begun accepting tokenized money market funds or Treasuries as collateral, because they reduce friction in capital management.

Seen through this lens, many early RWA buyers are not investors in the conventional sense. They are participants optimizing capital efficiency. That distinction matters because it suggests tokenized markets will grow first where capital constraints already exist, not where narratives are loudest.

3. Private Credit Works

Private credit has emerged as another leading RWA category, but its success is often misunderstood.

Tokenization has not magically made private credit liquid. What it has done is encourage shorter durations, clearer structures, and broader distribution to buyers who are comfortable trading some liquidity for yield. As a result, tokenized private credit products tend to focus on short-dated loans, predictable cash flows, and clearly defined redemption terms.

This works because it aligns the economics. Investors understand the liquidity they are accepting. Issuers understand the liquidity they can realistically provide. Tokenization here improves access and administration, not the fundamental risk profile.

Where tokenization aligns with the asset's underlying economics, demand follows. Where it doesn’t, demand fades.

4. The Invisible Buyer

One of the less obvious dynamics in tokenized RWAs is that many of the largest future participants may not see themselves as crypto users at all.

They are:

• Stablecoin issuers managing reserves
• Treasury teams optimizing idle cash
• Market makers seeking better collateral mobility
• Corporates managing cross-border liquidity

For these groups, blockchain is infrastructure, not identity. They will adopt tokenized assets quietly and at scale if the technology can reduce settlement time, free up capital, or simplify reconciliation.

This suggests that the long-term success of tokenized RWAs will look boring from the outside. Fewer headlines, more balance-sheet integration. Less retail hype, greater systemic adoption.

5. Where Tokenization Fails (and Why That Matters)

Not all assets benefit from being tokenized. Illiquid assets do not become liquid simply because they are fractionalized. Very often, tokenized real estate and collectibles struggle to find sustained demand on-chain because tokenization does not solve their core problem: a lack of organic buyers.

This is an important failure point to acknowledge. Tokenization is not a universal solution. Projects that prioritize “everything will be tokenized” over demonstrating how “tokenization improves that” are unlikely to find sustained positive market reception.

We should shift the conversation away from speculative narratives and back toward market fundamentals. This will give more credibility to the successful RWA cases where there is real demand.

Looking Ahead

Tokenized RWAs will succeed when they merge into workflows, save basis points, reduce risk, and make capital easier to deploy, not because markets suddenly decide that everything should move on-chain.

The current trajectory highlights three key principles:

• Trust drives demand: The highest demand is observed for assets that already possess high market trust.
• Efficiency before adoption: Implementation is guided by practical efficiency rather than ideological preference.
• Economic suitability is essential: The underlying market structure is less important than a solid economic fit.

In that sense, tokenization is not reinventing finance. It is rewiring parts of it.

The future of tokenized markets will likely be uneven, incremental, and far less dramatic than early narratives suggested. But where demand exists – rooted in yield, efficiency, and balance-sheet logic – tokenization becomes part of how markets function.

And this practical, demand-driven integration, more than any projection or pilot, is what makes this shift worth paying attention to.

Jeremy Ng is the Founder and CEO of OpenEden Group, a leading real-world asset (RWA) tokenization platform. He brings over 20 years of experience in institutional finance, fintech, and digital assets, and leads the company's strategic direction and growth as it builds compliant, tokenized RWA products that bridge traditional finance and Web3.