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As tokenized real-world assets reach $26.4 billion across blockchain networks, major banks and asset managers are adopting a dual-infrastructure strategy, using public blockchains like Ethereum for liquidity while reserving permissioned networks like Canton for confidential institutional operations.
The hybrid approach reflects growing institutional real-world asset (RWA) adoption but exposes tension between open finance principles and regulated finance requirements.
According to Marcin Kaźmierczak, co-founder of the blockchain oracle provider RedStone, the expansion of Institutional RWA Adoption is naturally creating two operational tracks within the tokenized asset ecosystem.
“There are some operations between institutions that simply have to stay private,” Kaźmierczak said in comments to Cointelegraph. “That’s the value proposition that Canton offers very effectively.”
One of the clearest signs of accelerating Institutional RWA Adoption is the emergence of a two-layer blockchain model for financial institutions.
Public blockchains have become the primary environment for developing market-facing financial products. Their open architecture allows for liquidity, composability and integration with decentralized finance applications such as lending protocols and tokenized yield vaults.
By contrast, permissioned systems are better suited to back-end operations such as settlement, bilateral transactions and internal asset management processes that cannot be exposed on public ledgers.
Platforms like Canton — developed by Digital Asset — allow banks and asset managers to tokenize and settle real-world assets while keeping transaction details restricted to the participating parties. According to network data, Canton processed roughly $6 trillion in tokenized RWA value in 2025, highlighting the scale of Institutional RWA Adoption already underway.
Rather than converging on a single blockchain architecture, financial institutions are increasingly building parallel systems tailored for different roles within the tokenized finance stack.
Public networks handle liquidity and investor access, while permissioned systems support operational infrastructure behind the scenes.
Although Institutional RWA Adoption has surged recently, industry insiders point to a critical turning point in 2022: Ethereum’s shift to proof-of-stake during the Ethereum Merge.
The upgrade significantly reduced the network’s energy consumption and demonstrated the reliability of large-scale blockchain upgrades — a factor that reassured many traditional financial institutions that had previously been cautious about deploying capital into blockchain-based systems.
“In 2022, when I was speaking with institutions, the Merge was a major question mark,” Kaźmierczak said. “When they saw the upgrade happen smoothly without disruptions, it gave them confidence.”
That growing confidence helped accelerate Institutional RWA Adoption, particularly among asset managers exploring tokenized funds, bonds and collateral.
Consulting firm McKinsey & Company estimated in 2024 that tokenized assets could reach approximately $2 trillion in value by 2030. Even more ambitious forecasts from Standard Chartered and Synpulse project the tokenization market growing to $30.1 trillion by 2034.
Regulatory developments have also played a role. The passage of the GENIUS Act in 2025 established a federal framework for stablecoins, which are widely used as settlement layers for tokenized financial instruments.
This regulatory clarity has helped strengthen Institutional RWA Adoption across global markets.
The current size of the tokenized asset market illustrates how quickly Institutional RWA Adoption is expanding. Data from RWA.xyz shows that more than $26.4 billion worth of tokenized real-world assets are currently distributed across blockchain networks.
More than $15 billion of those tokens are issued on Ethereum, which continues to dominate the sector thanks to its deep liquidity and mature developer ecosystem.
Ethereum also hosts over $160 billion in stablecoins, providing a massive liquidity layer that supports decentralized finance markets and helps fuel Institutional RWA Adoption.
For institutions seeking exposure to decentralized liquidity and programmable financial infrastructure, public chains remain the most attractive environment.
However, internal financial operations still demand privacy. Transactions such as collateral management, institutional settlement and asset custody workflows must often remain confidential due to regulatory and competitive concerns.
Permissioned networks address this challenge by limiting data visibility to approved counterparties while still enabling blockchain-based automation.
While the two-rail system appears to be gaining traction, there is ongoing debate within the industry about how privacy should be implemented in blockchain-based financial systems.
Many developers argue that cryptographic tools such as zero-knowledge proofs provide a more robust approach to privacy. Alex Gluchowski, whose company develops privacy-focused blockchain technology, has argued that zero-knowledge systems improve security by requiring mathematical proofs that every transaction follows protocol rules.
Even if operators are compromised, attackers cannot insert invalid transactions without producing a valid cryptographic proof.
Others take a different view. Yuval Rooz, whose company built the Canton Network, has suggested that fully opaque cryptographic systems could make auditing financial markets more difficult.
In a blog post discussing the issue, Rooz warned that excessive opacity could create “black box” financial systems where misconduct or accounting errors might go unnoticed — a scenario reminiscent of historic corporate failures such as Enron.
The debate highlights a central challenge for Institutional RWA Adoption: balancing transparency, security and confidentiality within a single financial architecture.
For now, the industry appears to be experimenting with multiple approaches simultaneously. Public blockchains continue to power liquidity and DeFi innovation, while permissioned networks replicate the operational processes required by regulated financial institutions.
Together, these systems are forming the parallel infrastructure that may ultimately underpin the next generation of global finance — and define the long-term trajectory of Institutional RWA Adoption.
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