The rise of real-world asset (RWA) tokenization—why asset managers are tokenizing everything

So, let me break the news to you. We are experiencing the rise of real-world asset (RWA) tokenization, and gone are the days when buying a U.S. Treasury bond felt like applying for a passport during a government shutdown.

Remember the exhausting paperworks you had to go through, the banker’s stare, and a 48-hour wait just to park your money safely? Yeah… you don’t have to relive those stressful moments again. In this era of real-world asset (RWA) tokenization, that period just got blockchained, tokenized, and kicked into a digital vault like Ronaldo does to a ball… Suiii!

So here’s the gist: According to RWA.xy, in the last 18 months, Wall Street has quietly lit the fuse on a financial time bomb called real-world asset (RWA) tokenization. We’re talking about $1 billion swelling to over $12 billion in TVL, not in crypto memes, but in digitized bonds, Treasuries, and even real estate, all chilling on-chain.

If you’d follow the rise of real-world asset tokenization trend closely, you must’ve seen that BlackRock’s BUIDL Fund is tokenizing government debt like it’s no big deal, and Franklin Templeton has wrapped their U.S. Government Money Market Fund in blockchain armor and deployed it across networks like it’s going to war. Look even more closely, and you will see that this is no child’s play, but  real-world asset (RWA) tokenization is a quiet revolution aimed at slashing settlement times from days to minutes. So let’s go straight in and talk about the revolution and the BIG WHY.

Real-world asset (RWA) tokenization is Wall Street’s new obsession: digitize everything, settle in seconds

Just like we established earlier, for years, Wall Street looked at blockchain the way your grandpa probably looks at TikTok: curious, suspicious, and ultimately dismissive. But now? That doubt seems to have dissolved even faster than a paper under the rain. It’s indeed the era of real-world asset (RWA) tokenization.

The SEC is sketching up new rules like an artist to let securities live on distributed ledgers. Arbitrum DAO dropped $11.6 million into tokenized Treasuries like it was play money. And BlackRock? The same BlackRock that practically is Wall Street? They quietly launched BUIDL, a money-market fund holding over $2.5 billion worth of on-chain Treasuries. And If that doesn’t ring a bell, read it again.

Meanwhile, Franklin Templeton isn’t far behind. Their OnChain U.S. Government Fund has expanded from Stellar to Base. And now, it’s even available on Aptos, Avalanche, Arbitrum, and Polygon—what started as a niche experiment is now live across six blockchains, handling serious funds.

Check the stat, zoom out and the numbers don’t lie. Six tokenized Treasury funds now control a large percent of the entire on-chain U.S. bond market. Currently, BlackRock’s BUIDL is the heavyweight at $2.9B. Franklin’s dancing around over $700M. Even DeFi-native Ondo Finance is packing +$1.2B in its Treasury offerings.

Although the total tokenized Treasury market is currently around $7B, the green signal is undoubtedly clear, that even a blind man can see it. Furthermore, BlackRock’s already met with the SEC’s crypto task force to push regulation forward i.e the TradFi giants are no longer watching from the sidelines, they’re trying so hard to write the playbook. And when Franklin Templeton and BlackRock makes move onchain, the finance world takes notice.

Suits and code co-building the next global finance market rails

While Wall Street was just warming up to crypto cocktails, DeFi’s architects were already laying down the rails, brick upon brick, protocol by protocol. And now the underground coders and the buttoned-up suit bankers are shaking hands.

Flashback to May 2025, JPMorgan, yes, the same JPMorgan that once threw shade at Bitcoin, linked its Kinexys bank ledger to a public blockchain using Chainlink’s CCIP like it was just another wire. In one clean atomic move, dollars from a JPM account swapped into tokenized Treasuries on Ondo Chain. No middlemen, no settlement delay, just pure DeFi intelligence.

And chainlink wasn’t just a conduit, it was the brain. Its Oracle system ensured the money and the asset landed at the same second, no human approval required. This wasn’t a proof of concept for slideshows. It was a full-blown test run of TradFi and DeFi dancing to a matrimony song of real-world asset (RWA) tokenization. And spoiler, it worked!

Meanwhile, Ondo Finance isn’t just watching the takeover of real-world asset (RWA) tokenization from the sidelines. They’re stealing the whole show. In February 2025, Ondo dropped “Ondo Nexus”, and it’s an initiative to link dozens of institutional funds. It’s all about setting up a liquidity layer that connects the who’s who of finance. Want to trade tokenized Treasuries from Franklin, WisdomTree, or Wellington? Ondo says,

“We’ll take them all, and give you stablecoins back in seconds”.

So, this convergence of TradFi tokens and DeFi infrastructure in real-world asset (RWA) tokenization is happening fast. And tokenized U.S. Treasury funds have already crossed $6 billion in onchain value, and that TVL is expanding weekly. Many see this as “institutional DeFi in action”, considering that the old suits (BlackRock, Franklin Templeton, etc.) are exploring suitorship with the onchain markets, while projects like Chainlink and Ondo build the pipes to connect everything.

The big why: Why asset managers are racing to tokenize everything

The reason is as simple as ABC, the old financial system is leaking value. Settlement takes days, custodians take a cut, markets close at 4 p.m, and all of these are bottlenecks, bleeding billions in efficiency. But real-world asset (RWA) tokenization flips that script as it unlocks 24/7 trading, real-time settlements, fractional ownership, and borderless liquidity, all coded into smart contracts.

The CEO of BlackRock once said:

“Tokenization isn’t about crypto—it’s about cutting settlement times from days to minutes.“— Larry Fink, BlackRock CEO (2024 shareholder letter)

So for asset managers, real-world asset (RWA) tokenization is not just innovation, but them getting to have a sigh of deep breath. The firms going on-chain aren’t coming to gamble with crypto, they’re buying speed, transparency, and a front-row seat to the next financial system.

Real-world asset (RWA) tokenization: Will the old guards embrace this or lobby against it?

Let’s not kid ourselves, the banks aren’t watching the takeover of real-world asset (RWA) tokenization from the sidelines anymore. They’re in the locker room, changing jerseys and strategizing.

For example, Goldman Sachs is openly calling for 24/7 trading of tokenized Treasuries, and JPMorgan’s already running token swaps on its blockchain. The Office of the Comptroller of the Currency (OCC) is giving the greenlight for banks to issue stablecoins without special permission. Even the Fed and FDIC are softening their tone.

In addition, behind the velvet curtains, legacy banks are joining arms. Citi, JPMorgan, and Bank of America are reportedly exploring a shared U.S. dollar stablecoin (a TradFi-native response to USDC’s growing footprint). Meanwhile, crypto-native firms like Circle and BitGo are applying for full-on bank charters, racing to get compliant before the stablecoin regulation hammer drops.

Final take

What we’re witnessing isn’t experimentation. It’s migration. The rise of real-world asset (RWA) tokenization isn’t coming, it has already built a mansion right under our nose, and it’s reshaping finance one step at a time.

Settlement times are collapsing from days to minutes. DeFi rails are being reinforced by TradFi titans. Banks aren’t backing away, they’re building the infrastructure to join the game.

What we’re seeing with real-world asset (RWA) tokenization is the beginning of institutional DeFi, where the old world and the new one aren’t clashing but merging. Real dollars, real yields, all on-chain. Funny to say, finance is finally getting its software upgrade and it’s fun to watch. What do you think?