Authors: Sandy Kaul , Franklin Templeton
Compiled by: Jia Huan, ChainCatcher
As regulations become clearer, public trust in the underlying encryption technology continues to rise. The trend of using blockchain tokens to hold investable assets is gaining momentum.
Assets targeted by this type of tokenization include: stocks, bonds, funds, ETFs, commodities, private equity, private credit, real estate, and other types of private equity funds. These are commonly referred to in the industry as "real-world assets," or RWA.
The name is intended to differentiate it from native cryptocurrencies or altcoins—which invest in projects and protocols within the crypto ecosystem rather than real-world assets.
Data from early 2026 shows that RWA tokenization is experiencing explosive growth. It is estimated to have grown fivefold since 2023, and threefold between 2025 and 2026 alone. (1)
Starting at approximately $5 billion in 2023, the on-chain value has now exceeded $25 billion. Private credit, government bonds, and real estate account for the vast majority of this value. (2)
The growth is accelerating. Forecasts show that the total size of tokenized RWA could reach $4 to $16 trillion by 2030, with some even predicting it will exceed $30 trillion by 2033. (3)
Regardless of the specific figures, the flurry of announcements from key industry players regarding their tokenization plans has provided strong support for these predictions.
The first mover breaks the situation
The tokenization of real-world assets is not a new concept. Franklin Templeton launched the first tokenized money market fund back in April 2021, which has been operating 24/7 ever since, with a total size of nearly $1.5 billion on the Benji technology platform.
The turning point that truly captured market attention was the extension of tokenization from government bonds and money market funds to stocks. Early entrants ignited this trend and accelerated the entire RWA tokenization process.
In June 2025, Robinhood was the first to announce that it would offer more than 200 tokenized US stocks to its EU customers. Its CEO, Vlad Tenev, said, "Tokenization is like a freight train that cannot be stopped and will eventually devour the entire financial system." (4)
Cryptocurrency exchange Kraken followed suit, launching xStocks on Ethereum and Solana in June of the same year, targeting investors outside the United States, the United Kingdom, and other restricted regions. In the following nine months, xStocks recorded $3.6 billion in on-chain transaction volume and approximately $25 billion in total transaction volume, with nearly 80,000 wallets holding approximately $225 million in tokenized assets. (5)
Ondo Global Markets launched over 200 tokenized stocks in September 2025. In the first six months after its launch, the total value exceeded $500 million, with cumulative trading volume exceeding $7 billion. Combined with the over $2 billion locked in tokenized US Treasury products by Ondo Finance, its total size continues to lead the market. (6)
American traditional institutions enter the scene.
The moves by emerging platforms were already eye-catching enough. But what truly made the entire industry realize that "a new era has arrived" was a series of announcements subsequently released by top traditional institutions.
The changes foreshadowed by these announcements will be the most significant upgrade to how securities operate since the introduction of bookkeeping in the early 1970s.
In December 2025, DTCC received a no-action letter from the SEC, paving the way for it to offer DTC-custodied tokenized RWAs starting in the second half of 2026. (7)
The New York Stock Exchange (NYSE) announced the development of a tokenized securities trading and on-chain settlement platform, supporting 24/7 operation, instant settlement, USD-denominated orders, and stablecoin funding. (8)
NASDAQ has partnered with Kraken's parent company to launch an equity token design for publicly traded companies, supporting automated corporate actions such as programmable investor interaction, proxy voting, and dividend payments. The token is expected to launch in early 2027. (9)
Three tokenization paths
Tokenization continues to gain momentum, but to truly understand how it will transform the financial industry, several concepts need to be clarified. In the coming months, three types of tokenized products may emerge in the market:
Digital native tokenized products
Directly hold the underlying asset (stocks, bonds, commodities, or funds). Token holders enjoy full ownership and related protections, with ownership recorded in a single on-chain ledger; there are no off-chain records.
Once a transaction is verified, funds and assets are immediately and atomically settled. Franklin Templeton's tokenized money market fund is an example of this.
Synthetic asset tokens
It's also a digitally native product, but it doesn't directly hold the underlying asset. It's more like a swap arrangement, passing on the economic benefits generated by the underlying asset to the holder.
Token holders actually hold shares in a special purpose vehicle (SPV) that holds the underlying assets. These products are also known as "packaged" or "asset-backed" investments. Payments and tokens are exchanged instantly upon transaction verification. Tokenized stocks from Robinhood, Kraken, and Ondo fall into this category.
Digital Mirror Token
The entity does not directly hold the reference asset. Asset ownership is recorded in a traditional off-chain form (such as a limited partner equity stake), and the token serves only as a "receipt" to prove that the holder owns the off-chain asset.
These types of products require two ledgers: an off-chain legacy system records actual ownership (typically requiring overnight batch updates), and an on-chain ledger tracks the tokens separately. Tokens are minted only after a position is established and verified off-chain; tokens are destroyed immediately after a position is closed. They are subject to traditional T+1 or longer settlement cycles. Planned issuances by DTCC, NYSE, and NASDAQ fall into this category.
Permissionless vs Permissioned Tokens
All three models require the transfer agent to execute a new compliance process—"Know Your Token" (KYT). This process examines the wallet addresses used to buy and sell tokens and tracks recent token transfers. The blockchain itself assists this review through whitelisting to confirm that the wallet is not on any restricted lists and that the holder has completed eligibility verification.
Synthetic asset tokens require no additional verification beyond KYT, thus qualifying as permissionless tokens. Transactions can proceed directly as long as the wallet passes KYT verification and meets the holding requirements.
Digital native products and digital mirror tokens are permissioned tokens. Simply passing KYT is not enough; holders must also complete a full KYC/AML (Know Your Customer/Anti-Money Laundering) check.
Utility differences among the three models
Synthetic asset tokens have the widest utility in the crypto ecosystem, but offer the most limited protection for investor rights.
These tokens can circulate freely between any wallet that meets the KYT criteria, can be deposited into DeFi protocols as assets or collateral, allowing holders to seek liquidity 24/7 and have the opportunity to earn additional returns.
However, the trade-off is that holders do not have voting rights, economic benefits (yield, dividends) are indirectly transmitted rather than directly paid, and in most cases, they have no right to claim against the issuer of the underlying asset.
The digitally native RWA token has slightly less utility, but is subject to more restrictions. Tokens can be transferred between wallets, but only wallets that have passed both KYT and KYC/AML verification. Holders are the official owners of RWA and enjoy full voting rights and direct economic benefits.
These types of tokens are difficult to use in DeFi—tokens staked in protocols tend to get mixed into liquidity pools and cannot be linked to a specific wallet. However, they are highly efficient as collateral for financing arrangements and derivatives trading.
Because ownership records are updated on-chain every second, this advantage cannot be achieved in traditional models. Take Franklin Templeton's tokenized money market fund as an example: interest begins accruing the moment an investor establishes a position, and the returns are directly deposited into the wallet daily in the form of incremental new tokens—something that digital mirror models cannot do.
Digital mirror tokens have the lowest utility of the three models. Rights and benefits are managed by an off-chain legacy system, with allocations going into traditional investment accounts via fiat currency and paid out periodically (e.g., money market funds pay returns at the end of the month). Tokens are tied to specific off-chain holdings, cannot be transferred between wallets, are minted upon subscription, and destroyed upon redemption.
Even so, digital mirror tokens still have value: the tokens reside directly in the investor's wallet, rather than being a record in an intermediary's database, offering greater transparency. The tokenized form also supports 24/7 trading, ensuring that on-chain token records are updated in real time even if off-chain ownership records lag.
Heading in the right direction
Compared to the traditional methods that have dominated securities and fund processing over the past 50 years, the three RWA tokenization models each have their unique advantages and novel utilities.
All paths are based on the latest blockchain technology, with tokens acting as "smart" wrappers that embed and automate operational processes. Each model enhances portfolio transparency, makes assets easier to use as collateral, and some models even create entirely new yield opportunities.
Most importantly, RWA tokenization is driving the entire financial industry, from crypto-native institutions to traditional financial participants, toward a shared infrastructure.
Wallets will become the core financial interface for individuals and institutions. And today's wave of RWA tokenization is the bridge to that future.
