Tokenized real-world assets have entered a new stage as the market moves beyond simply placing traditional assets on blockchains.
Growing institutional participation has expanded supply, but liquidity and practical onchain use now shape the sector’s next phase.
Market participants increasingly want assets that can move between platforms, support lending, and trade efficiently.
That shift could determine whether tokenized RWAs develop into functional financial infrastructure or remain digital versions of traditional products.
Castle Labs said in a September 14 report that the industry’s next phase will depend on utility rather than additional listings.
The research firm highlighted liquidity, collateral use, accessibility, and interoperability as critical areas for future growth.
That distinction matters for institutions exploring tokenization and DeFi protocols seeking yield-bearing collateral.
Greater utility could help tokenized assets generate value across financial markets instead of functioning mainly as wrappers.
US Treasuries anchor the growing tokenized RWA market
RWA.xyz reported $38.86 billion in distributed asset value as of September 15, up 1.00% over 30 days. The market also included about 4.24 million asset holders.
Castle Labs said US government debt represents more than $15.9 billion of tokenized real-world assets. Commodities account for roughly $4.9 billion, while active strategies represent another $3.6 billion.
Asset-backed credit totals about $2.56 billion, while tokenized stocks account for approximately $2.52 billion.
Blockchain distribution also highlights the market’s fragmentation. RWA.xyz data from September 14 showed Ethereum leading with $17.3 billion in tokenized assets.
BNB Chain ranked second with $5.6 billion, followed by Solana with approximately $4.3 billion. That distribution creates challenges when investors need liquidity across different blockchain networks.
Earlier growth had already accelerated sharply. CoinGecko reported that tokenized RWAs exceeded $19.3 billion by the end of 2026’s first quarter.
That represented more than threefold growth from January 2025 levels.
Castle Labs said asset supply no longer represents the main obstacle. Kraken, Robinhood, Ondo, Securitize, Franklin Templeton, and BlackRock already provide tokenized exposure through different products.
Instead, the industry now faces questions about what investors can actually do after acquiring those assets.
Castle Labs divides tokenized RWA utility into accessibility and composability. Tokenization has expanded access to trading venues, but access alone does not create meaningful onchain utility.
Assets need deep liquidity and the ability to move between venues. They must also work as collateral and interact efficiently with other blockchain-based financial products.
Longer trading hours in traditional markets have also reduced one historical advantage held by cryptocurrency markets. Round-the-clock access alone may therefore become less important as traditional infrastructure evolves.
Tokenized assets remain dominated by wrappers as liquidity lags
Pantera Capital found that tokenized RWA infrastructure still remains relatively immature despite rapid market growth.
Its first-quarter report tracked 593 assets, including 542 live products. The average Tokenization Progress Index reached only 2.04 out of five.
Pantera classified 77.6% of tracked assets as wrappers. Another 11.1% qualified as hybrid products, while only 2.7% achieved fully native status.
The firm compared today’s tokenization market with the internet’s early “newspaper-on-a-website” period. Existing products have moved onto new infrastructure without fully using its technological capabilities.
As a result, many tokenized assets still operate much like their traditional counterparts. That structure helps explain why liquidity and market infrastructure have struggled to match asset growth.
The OECD identified similar barriers to adoption. It pointed to thin liquidity, custody gaps, limited payment networks, legal uncertainty, and weak interoperability.
Tokenization alone does not automatically create liquidity. Markets still require market makers, two-sided order flow, and reliable price discovery.
Policy developments could support further expansion. TRM Labs said stablecoin regulation progressed across more than 70% of 30 jurisdictions during 2025.
The firm also reported that about 80% of financial institutions had announced digital asset initiatives.
Meanwhile, IMF economist Tobias Adrian said in April 2026 that tokenization could support atomic settlement and continuous liquidity management. He also highlighted embedded compliance as another potential benefit.
However, Adrian warned that inadequate legal frameworks and unsafe settlement assets could increase financial instability. Faster banking processes could also deepen concentration and fragmentation risks.
BCG reached a similar long-term view in its May report. It said digital RWAs remain relatively small but could gain major structural importance within banking over the next decade.
The market’s next test will therefore extend beyond the value of assets placed onchain. Liquidity, interoperability, collateral use, and reliable settlement will determine how much of that value becomes financially useful.
