🚀 TL;DR
🧩 Tokenization = turning a legal claim on a real asset into a compliant digital token you can hold, transfer, and sometimes trade.
📈 2030 outlook: roughly 1 to 4 trillion dollars of tokenized assets off a tiny base, implying very high double digit growth.
🧭 Mass adoption stack: permissioned tokens, on chain transfer agents, stable settlement money, licensed venues, and scheduled liquidity.
✅ Best near term use cases: cash and Treasuries, tokenized pooled funds, private credit, then income real estate.
💡 PE and VC for everyday investors: diversified tokenized feeders or interval or evergreen funds with periodic NAVs and windowed liquidity.
🔎 Reality check: token does not equal instant liquidity or lower risk. Read window policies, fees, and wallet recovery before you subscribe.
1| 📊 Inside the Numbers: 2025 snapshot
Tokenized U.S. Treasuries and cash equivalents have reached roughly $7.5B in assets under management, up sharply year to date.
BlackRock’s on-chain liquidity fund BUIDL sits around $2.2 billion in AUM. Franklin Templeton’s on-chain U.S. Government Money Fund (FOBXX) reports hundreds of millions in assets and invests at least 99.5 percent in U.S. government securities, cash, and fully collateralized repos.
Across all tracked tokenized real-world assets, excluding stablecoins, market trackers show activity in the tens of billions, with holders and issuers growing month over month.
2| 🧩 Tokenization in simple terms
What is Tokenization? Tokenization turns real assets such as cash, Treasuries, real estate, or fund shares into digital tokens that approved investors can hold, transfer, and sometimes trade. The tokens operate through smart contracts, while legal ownership, investor records, compliance, taxes, and custody remain with trusted entities like transfer agents and custodians. In practice, this creates a blend of on-chain and off-chain systems.
Why does Tokenization Matter? Tokenization lowers investment minimums, speeds up administration, enables around-the-clock transactions, and enforces compliance through code. It does not change the risk of the asset, only the system it operates on.
3| 🚀 The market: size, CAGR, momentum
Where credible forecasts cluster by 2030: McKinsey’s base case projects tokenized financial assets to be around $2T by 2030, with a broader range that spans approximately $1-4T. Consider that as the realistic range for planning, excluding cryptocurrencies and most stablecoins.
Why now? Regulatory sandboxes and pilot programs give institutions a safe way to transition into production. The EU’s DLT Pilot Regime focuses on trading and settling security tokens. The UK’s Digital Securities Sandbox allows issuance, trading, and settlement under a tailored legal framework. Singapore’s Project Guardian brings banks and asset managers together to test tokenized funds and liabilities. These efforts are shaping the standards and liquidity practices for the market.
4| 🧭 Where mass adoption actually happens
Regulated, permissioned tokens:
Security tokens whitelist investors after accreditation and KYC checks. In the United States, most offerings use Regulation D (accredited) or Regulation S (offshore). Resales follow Rule 144 and the rulebook of the trading venue.
On-chain share register:
A regulated transfer agent keeps the live cap table on chain. Distributions and corporate actions are run by rules in the smart contract. This is where the operational savings come from: fewer reconciliations, faster updates, cleaner audits.
Digital cash for settlement:
Regulated stablecoins or tokenized bank deposits let you exchange “asset for cash” in a single, final transaction. Settlement works 24/7 across time zones. Recent bank pilots and public programs show these rails in production.
Permissioned secondary markets:
Trading happens on licensed venues only (ATS in the US, MTF in the EU or UK) and usually after the required hold period. Volumes are still modest, so many issuers use scheduled trading windows and designated market makers to concentrate liquidity.
5| ✅ Best near-term use cases we rate highest
1. Cash, Treasuries, and money market funds
These assets already work well on chain with clear pricing and daily NAVs. They are helping custody, wallets, and back offices learn how to run on public ledgers. Expect more wrappers, venues, and integration with treasury systems.
2. Tokenized pooled funds
Funds with scheduled subscriptions and redemptions give an ETF-like experience without constant liquidity. Mutual funds, bonds, and loans are emerging as early leaders.
3. Private credit
Tokenization makes yield plus programmable interest attractive. Growth is coming through private placements with strong underwriting, better data, and improved reporting.
4. Real estate
Stabilized multifamily and industrial properties are strong pilots because of predictable cash flows. Dubai’s government-backed program shows how public infrastructure can reduce friction and build trust around title, custody, and compliance.
6| 💡 Tokenized private equity and VC for everyday investors
What changes?
Tokenized feeder and diversified vehicles can reduce minimums, make onboarding easier, and create scheduled secondary trading windows on regulated venues. Wallets are approved after KYC, NAVs (Net Asset Value) are published regularly, and smart contracts enforce the same rules found in fund documents.
What does not change?
Tokenization does not eliminate risk or guarantee liquidity. Prices and exits still depend on buyer demand, venue depth, and market makers. This is why most structures allow quarterly or semiannual redemptions instead of daily trading.
7| 🧭 Could top-tier VC become investable like ETFs
The likely pathway: The first step won’t be a public ETF. It will be a tokenized, diversified venture vehicle with clear eligibility, periodic pricing, and scheduled trading windows on a regulated venue. A key signal is that major managers already run tokenized cash strategies on public chains. As those programs strengthen fund operations, more alternative structures can follow.
8| 🏠 Real estate is the next logical beneficiary
What does this look like?
Break big into small. Large commercial properties and other out-of-reach assets can be split into millions of small tokens. An SPV holds title. Each token represents equity or defined income rights.
Automated cash flow. Rents flow to the SPV, then to wallets on a monthly or quarterly schedule in stablecoins. The on-chain register tracks who gets paid.
Designed liquidity. Trading is not constant. Issuers publish quarterly windows on a licensed venue, often with a buyback or market-making budget to concentrate bids and offers.
Transparent data. A property dashboard posts rent rolls, occupancy, DSCR, appraisal reports, capex plans, and lender covenants on a schedule. That data anchors the window price around NAV.
Flexible structures. Tokens can mirror common equity, preferred equity, or senior notes tied to a property or a portfolio. Rights and waterfalls are encoded in docs and enforced in software.
Investor protections. Look for lender consent to transfers, escrow for taxes and insurance, clear fee schedules, voting thresholds for major actions, and a documented wallet recovery process.
Why this matters for everyday investors:
Fractional tokens turn a $200m tower or a multi-state industrial portfolio into small shares you can actually buy. You get scheduled income, programmatic records, and a realistic path to sell during set windows. The asset does not change. The rails/delivery does.
9| 📋 Quick comparison
What you get | Traditional private assets | Tokenized private assets |
|---|---|---|
Minimums | Often 6 figures | Often 4 to 5 figures |
Onboarding | Weeks of forms and wires | Hours or days with in-app KYC and bank or stablecoin rails |
Records | Off-chain cap tables and PDFs | On-chain ledger synchronized with a transfer agent |
Compliance | Manual checks at each transfer | Whitelisted wallets and encoded transfer rules |
Liquidity | Illiquid and hard-to-access secondaries that are rarely available | Scheduled liquidity windows or 24/7 trading |
Cash Flows | ACH or Checks | Programmed and seamless token/coin distribution |
10| 🧭 Bottom line
We are bullish because tokenization upgrades the rails for assets we already trust.
It turns paperwork into software. Ownership, compliance, payouts, and records run on code. That cuts friction and error.
It shortens the money loop. Stable, 24/7 settlement means faster funding and faster distributions.
It widens the gate. Smaller minimums and programmable eligibility expand who can participate without lowering standards.
It already works at scale where it matters first. Cash and Treasuries on chain prove real demand and clean operations.
It fits income assets next. Pooled funds, private credit, and stabilized real estate map well to scheduled pricing and windowed liquidity.
It builds optionality. Once the cap table, cash rails, and venue are live, secondary markets can deepen over time.
Footnotes:
PMcKinsey explainer — What is tokenization? (Jul 25, 2024) — McKinsey & Company — scenario band overview. https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-tokenization
McKinsey scenarios — From ripples to waves: The transformational power of tokenizing assets (Jun 20, 2024) — McKinsey & Company — ~$1T to ~$4T by 2030. https://www.mckinsey.com/industries/financial-services/our-insights/from-ripples-to-waves-the-transformational-power-of-tokenizing-assets
Ledger Insights summary — McKinsey estimates tokenization will be less than $2 trillion by 2030 (Jun 21, 2024). https://www.ledgerinsights.com/mckinsey-estimates-tokenization-will-be-less-than-2-trillion-by-2030/
RWA.xyz — Tokenized U.S. Treasuries dashboard (live). https://app.rwa.xyz/treasuries
RWA.xyz — Global RWA analytics homepage (live). https://rwa.xyz/
Security Token Market — BlackRock USD Institutional Digital Liquidity Fund (BUIDL) page (live). https://stomarket.com/sto/blackrock-usd-institutional-digital-liquidity-fund-buidl
Franklin Templeton — Franklin OnChain U.S. Government Money Fund (FOBXX) fund page and policy (live). https://www.franklintempleton.com/investments/options/money-market-funds/products/29386/SINGLCLASS/franklin-on-chain-u-s-government-money-fund/FOBXX
ESMA — DLT Pilot Regime explainer and materials (live). https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/dlt-pilot-regime
ESMA — Report on DLT Pilot Regime next steps (Jun 25, 2025). https://www.esma.europa.eu/press-news/esma-news/esma-suggests-amendments-dlt-pilot-regime-make-it-permanent
KPMG — The UK Digital Securities Sandbox is open (Nov 2024). https://kpmg.com/xx/en/our-insights/regulatory-insights/the-uk-digital-securities-sandbox-is-open.html
MAS — Project Guardian program page (Aug 4, 2025). https://www.mas.gov.sg/schemes-and-initiatives/project-guardian
MAS — Project Guardian FX Workstream: Use of Tokenised Bank Liabilities for Transaction Banking (Jul 1, 2025) PDF. https://www.mas.gov.sg/-/media/mas-media-library/development/fintech/guardian/project-guardian-fx-workstream-transaction-banking.pdf
Financial Times — Investors pile into tokenised Treasury funds (Jul 2025). https://www.ft.com/content/24133257-62eb-41f5-9778-0be200fd3b7d
Investopedia — Goldman Sachs and BNY Mellon step into tokenized money market funds (Aug 2025). https://www.investopedia.com/bny-mellon-and-goldman-sachs-step-into-tokenized-money-market-funds-1177745