The tokenization of real-world assets (RWAs) is moving closer to mainstream finance, although its near-term impact on crypto markets may remain limited. NYDIG says long-term value will depend on how these assets are opened, connected and regulated across blockchain networks.
In brief
- NYDIG states that tokenized RWAs bring small, early gains to crypto networks, primarily through fees, with broader value tied to access and connectivity.
- Ethereum dominates public blockchains for RWAs, but strict rules and design limits reduce the depth of interaction of these assets with DeFi tools.
- Private networks like Canton dominate tokenized assets, holding most of the market value thanks to better integration with traditional financial systems.
- Wider adoption will depend on regulatory changes, better infrastructure, and fewer transfer limits before RWAs can play a larger role in DeFi.
NYDIG sees incremental gains from tokenized assets as infrastructure matures
Greg Cipolaro, global head of research at NYDIG, argued that tokenized stocks and other RWAs will not immediately transform crypto ecosystems. He noted that early benefits are modest and linked mainly to basic blockchain usage rather than deeper financial integration.
The benefits to the networks these assets reside on, like Ethereum, are small at first, but increase as their access, interoperability, and composability expand.
Greg Cipolaro
In the short term, transaction fees are the main advantage for blockchains hosting tokenized assets, Cipolaro noted. Over time, the value could grow if assets gain wider access, interact more easily with decentralized finance (DeFi) tools, and experience fewer restrictions. As an example, he cited Ethereum, which remains the leading public blockchain for RWAs.
Interest in tokenization has increased as major crypto platforms seek to introduce tokenized stocks to the US market. Coinbase and Kraken are among the companies exploring these offerings after launching similar products overseas.
The regulatory tone in Washington has also changed. Paul Atkins, Chairman of the Securities and Exchange Commission, recently indicated that tokenization could be adopted within the American financial system in the coming years, a signal that Cipolaro considers favorable for long-term growth.
However, Cipolaro stressed that progress will take time. The technology requires refinements, the infrastructure must mature, and the rules must be adjusted before tokenized assets can operate smoothly in DeFi markets. Until then, the impact on traditional cryptocurrencies should remain limited for several years.
Cipolaro: The initial impact of tokenization on crypto remains limited
Several factors currently determine how tokenized assets affect blockchain networks:
- Transaction fees generated by the activity of tokenized assets.
- Network effects related to the issuance and storage of assets.
- Restrictions on who can access or transfer assets.
- Incomplete compatibility with DeFi protocols.
- Regulatory requirements related to securities laws.
The division between private and public blockchains remains at the heart of this challenge. Tokenization of real-world assets covers a wide range of structures, making integration difficult.
Cipolaro explained that form and function vary depending on whether assets are issued on public or private networks. Canton Network, a private blockchain developed by Digital Asset Holdings, currently dominates the industry. It is home to approximately $380 billion in represented RWA value, or approximately 91% of the total market.
Public blockchains play a lesser role compared to private networks. Ethereum hosts approximately $12.1 billion in tokenized assets, remaining the most active open network for RWAs. Even on Ethereum, asset design often reflects traditional finance. Securities rules still apply, requiring brokers, transfer agents, KYC checks, investor accreditation and portfolio whitelisting processes.
These controls limit the free movement of tokenized assets across protocols, reducing their usefulness in automated lending and trading systems. As a result, many cannot yet function as collateral, lending assets or trading instruments in DeFi systems. Cipolaro explained that these barriers explain why immediate profits in crypto markets remain “light.”
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