Trump-Era Policies May Drive Surge in Real-World Asset Tokenization

Real-world asset tokenization is rapidly gaining traction as a pivotal innovation poised to transform the financial sector. By bridging traditional finance (TradFi) and decentralized finance (DeFi), real-world asset tokenization promises to enhance liquidity, accessibility, and transparency. With shifting regulations in the United States and increasing demand for diversified tokenized products, experts believe 2025 will be a defining year for this emerging market.

The Role of RWAs in Finance

Real-world asset tokenization, or RWA, involves digitizing physical assets like real estate, Treasurys, and commodities into blockchain-based tokens. These tokens enable fractional ownership and trade across decentralized platforms, unlocking previously illiquid markets for broader participation.

Eli Cohen, general counsel of Centrifuge, an RWA tokenization platform, emphasized the importance of this trend. According to Cohen, real-world asset tokenization underpins the yield for stablecoins in DeFi, primarily through tokenized Treasurys. However, he predicts significant diversification in tokenized products by 2025.

“As demand for yields increases, we’ll see tokenized products extending beyond Treasurys to include higher-yielding, safe investments,” said Cohen. This shift is expected to benefit stablecoins, which currently rely on tokenized Treasurys as their primary yield source.

Regulatory Shifts Under the Trump Administration

A major driver for real-world asset tokenization in 2025 could be a favorable regulatory landscape. With the incoming Trump administration, Cohen anticipates a departure from what he called the “open hostility of the Gensler SEC.”

“Trump’s arrival may mark a turning point for RWAs,” Cohen noted. “We expect a public renouncement of restrictive policies like Operation Chokepoint 2.0 and a shift toward embracing crypto markets.”

Cohen also highlighted the possibility of the Trump-appointed SEC approving tokenized security retail offerings, a move that could bolster confidence among TradFi firms.

Further, the evolving enforcement of the EU’s MiCA (Markets in Crypto-Assets) rules for stablecoins may complement U.S. regulatory shifts, creating a global framework for RWA adoption.

Growing Market Momentum

Real-world asset tokenization has already gained momentum, with high-profile deals signaling its potential. A notable example is the $1 billion agreement between Mantra and Damac to tokenize Middle Eastern assets, showcasing the scalability of this technology.

Cohen also pointed out that centralized exchanges like Coinbase and Kraken are increasingly collaborating with governmental authorities, addressing long-standing security concerns associated with crypto. “As crypto service providers mature, security risks will be mitigated, driving more institutional adoption of real-world asset tokenization,” he said.

Stablecoins and Tokenized Products

Stablecoins, a key component of the DeFi ecosystem, stand to benefit significantly from the evolution of real-world asset tokenization. Cohen explained that high Treasury rates and growing competition among stablecoin issuers are pushing the market toward innovative, higher-yielding investments.

This shift could lead to a broader array of tokenized assets backing stablecoins, enhancing their appeal to institutional and retail investors alike. With their ability to provide stability and liquidity, stablecoins may emerge as a critical driver of real-world asset tokenization in 2025.

Overcoming TradFi Resistance

One of the challenges facing real-world asset tokenization is resistance within traditional financial institutions. However, Cohen believes the incoming administration’s regulatory stance could alleviate these barriers.

“TradFi firms often face internal resistance to engaging with crypto markets,” he said. “A more favorable regulatory environment under the Trump administration could change that dynamic, paving the way for wider adoption of RWAs.”

As 2025 approaches, real-world asset tokenization is set to redefine the financial landscape. By unlocking liquidity in traditionally illiquid markets, RWAs offer an unprecedented opportunity for both TradFi and DeFi to collaborate and innovate.

Cohen concluded, “The potential for real-world asset tokenization is immense. With regulatory clarity and advancements in crypto infrastructure, we’re poised to see RWAs play a central role in the future of finance.”

With deals like the Mantra-Damac partnership and growing support from centralized exchanges, the stage is set for real-world asset tokenization to become a cornerstone of global financial innovation.

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