How Tokenization of Real-World Assets (RWA) is Transforming Traditional Finance

4 min readNov 8, 2024

Imagine being able to invest in a luxury Dubai skyscraper valued at $50 million, with only $5,000. A decade ago, this was almost impossible for most people. Today, thanks to tokenization, you can now own a share of high-value assets, receive proportional rental income, and transfer ownership almost as easily as trading stocks. This isn’t science fiction — it’s the evolution of modern finance made possible by blockchain technology.

What Is Tokenization?

Tokenization can be compared to slicing a pizza into equal parts — except here, instead of a pizza, you have assets like real estate, private equity, or investment funds. Each “slice” (or token) represents a fraction of the total asset, granting the owner rights and privileges linked to it. Unlike traditional fractional ownership, digital tokens make it easier to buy, sell, and transfer ownership of these assets. Think of how credit card numbers represent your bank account in transactions; similarly, tokenization allows digital representation of real-world assets, simplifying management, conversion, and transfer through blockchain technology.

The State of Tokenization Today: By the Numbers

Tokenization has already started reshaping financial markets in 2024. Here are some numbers that show the growth and potential of tokenized assets:

Market Value: The total market size of tokenized assets reached an impressive $186 billion, and it’s growing.
Growth Rate: Year-to-date, tokenized assets have grown by 32%.
Tokenized Assets (excluding stablecoins): Worth $12 billion, up 53% this year alone.
Institutional Interest: BlackRock’s tokenized fund (BUIDL) amassed $500 million in just a few months.
Asset Issuers and Adoption: Over 150 asset issuers operate across 20+ public blockchains, indicating widespread adoption.
Stablecoin Accounts: 120 million accounts globally hold stablecoins, demonstrating the reach and influence of tokenization.

Leading voices in finance also acknowledge this trend. Larry Fink, CEO of BlackRock, said, “The next step going forward will be the tokenization of assets.” Similarly, BCG’s latest report called fund tokenization the “third revolution” in asset management after mutual funds and ETFs.

The Future of Tokenization: Transforming Traditional Finance

Tokenization isn’t just about digitizing assets — it’s reshaping how we think about investments, ownership, and financial services. According to industry predictions:

Tokenized Illiquid Assets: Estimated $16 trillion by 2030 (Standard Chartered).
Tokenized Digital Securities: Projected to reach $5 trillion by 2030 (Citi).
Overall Tokenized Assets: Expected to grow to $30 trillion by 2034 (Standard Chartered).
Asset Under Management (AUM): $600 billion by 2030 (BCG Analysis).

Statistics aside, the real transformation lies in what tokenization enables:

Key Advantages of Tokenization

Democratizing Premium Investments: With tokenization, high-value assets are now accessible to a broader audience:

For example, a $50 million Dubai property can be collectively owned by 10,000 investors, each with a $5,000 share.
Investors earn a share of the rental income and benefit from property appreciation.
Tokens can be traded instantly, offering liquidity that’s traditionally absent in real estate.
Smart contracts ensure automatic distribution of returns and management of ownership rights.
Lower entry barriers enable retail investors to access diverse investment opportunities.

2. Revolutionizing Traditional Finance: Beyond real estate, tokenization is transforming the way investment banking operates:

24/7 Global Trading: With instant settlement across time zones.
Automated Compliance: Reducing paperwork and increasing efficiency.
Lower Transaction Costs: Through the removal of intermediaries.
Enhanced Transparency: Real-time tracking of transactions and asset ownership.
Programmable Features: Automated dividend distributions and voting rights.

3. Facilitating Borderless Transactions: Tokenization simplifies international investments by eliminating traditional barriers:

Global tokens reduce currency conversion issues.
Instant currency conversion through stablecoins with minimal forex fees.
Cross-border settlements without intermediaries, enabling faster, direct transactions.

Tokenization isn’t merely about digitizing assets; it’s redefining ownership and investment for the 21st century. As tokenization becomes a global movement powered by distributed ledger technology, we are progressing towards a more inclusive financial ecosystem.

About Valuit

At Valuit, we are committed to building an equitable ecosystem by drawing on our extensive experience in compliance, capital markets, and blockchain. Our team includes industry professionals who bring specialized insights from leading partner organizations around the globe, continually pushing the boundaries of blockchain innovation and setting new standards in product development.

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