Tokenization Today

Introduction

Fred Ehrsam, co-founder of Coinbase and Paradigm, wrote the following in 2020: “DeFi is a cute acronym for ‘decentralized finance,’ but it obfuscates its true potential: a new financial system built from the ground up. While DeFi is small today – containing, as of this writing, tens of billions of dollars in assets relative to hundreds of trillions in the traditional financial system – it is growing rapidly. And while its rise will take decades, I believe DeFi will be the primary financial system of the world.”

Ehrsam's words are still prescient today. The most successful innovation that has come out of DeFi thus far is fiat-collateralized stablecoins, or tokenized dollars, with over $200B in circulation. Stablecoins are the original "real-world asset" (RWA), though we think this term will become obsolete once every asset is represented onchain over the coming years. When we talk about RWAs we are simply referring to offchain assets. Within this context, we can define tokenization as the process of taking an offchain asset and representing it in onchain with possible fractional ownership. 

Outside of stablecoins, the value of tokenized assets sits below $20B today but may represent a multi-trillion dollar opportunity over the next decade. Boston Consulting Group (BCG) projected that the tokenization of illiquid assets could reach $16 trillion by 2030, while Citi Research forecasted that tokenized digital securities could amount to between $4 and $5 trillion by 2030. This report analyzes the current state of tokenization outside of stablecoins, identifying the key trends, areas of opportunity, regulatory challenges, and future outlook.

Before diving into the report, we should note that we have written various reports related to RWAs in the past, which we summarize here for easy access:

• Stablecoins: "Room-Temperature Superconductors for Financial Services" (March 15, 2025)
• Provenance: Leader in the Race to Tokenize Wall Street (November 14, 2024)