The history of financial exclusivity is often a story about maintaining privilege through exclusion.
In the 20th century, Augusta National Golf Club was criticized for its obvious elitism. As the host of the Masters Tournament, the club has only 300 members, with a very strict admission process that doesn't even allow potential members to apply directly. Membership must be obtained through invitation. Another way is to be nominated by someone and then wait patiently.
Critics call it the ultimate 'men's club,' and it certainly was before 2012. Worse still, for decades, the club banned African Americans from membership. Sports journalists questioned why the most prestigious event in golf would be held at a venue that excluded 99.9% of humanity. Public sentiment was extremely negative: a small group of wealthy white men controlled opportunities that millions yearned to experience.
The club takes pride in having some notable members, including four-time Masters champion Arnold Palmer, business moguls Warren Buffett and Bill Gates, and Dwight D. Eisenhower, the 34th President of the United States.
Clearly, this is not the most democratic way to run a club.
But why would Augusta National Golf Club pursue the democratization of world-class golf courses? Open access rarely builds high-end brands. The club pursues excellence. With only 300 members and virtually no external players, the course remains pristine year-round. Every detail is managed with precision.
For example, it can withstand the rigorous maintenance required by the legendary brand of Augusta National Golf Club. Think about it: hand-trimming the fairways with scissors, coloring the pine needles, and relocating entire groves for the perfect television angle. Fewer stakeholders mean
The same logic explains one of the most misunderstood trends in today's cryptocurrency space: why real-world asset (RWA) tokens—from digital representations of government bonds to real estate—are predominantly held by a few wallets.
But the exclusivity here is not based on gender or race.
BlackRock's tokenized money market fund BUIDL (BlackRock U.S. Dollar Institutional Digital Liquidity Fund) is an approximately $2.4 billion asset, but as of July 31, 2025, there are only 81 holders.
Similarly, Ondo Finance's U.S. Treasury fund OUSG (Ondo Short-Term U.S. Government Bond Fund) shows only 75 holders on-chain. In contrast, major stablecoins like USDT/USDC are held by millions of addresses (approximately 175 million stablecoin holders across networks).
At first glance, these digitized dollar assets resemble all the problems that blockchain was supposed to solve: centralization, gatekeeping mechanisms, and exclusivity. Since you can copy and paste a wallet address, why can't you purchase these yield-generating tokens like any other crypto asset?
The answer lies in the same operational logic that allows Augusta National Golf Club to maintain its exclusive operation. The design of these tokens is centralized.
The Regulated Reality
The history of financial exclusivity is often a story about maintaining privilege through exclusion. But in these cases, exclusivity serves a different purpose: to keep the system compliant, efficient, and sustainable.
Most RWA tokens represent securities or funds that cannot be freely offered to the public without registration. Instead, issuers restrict tokens to accredited or compliant investors using private or limited offerings regulated by the U.S. Securities and Exchange Commission (SEC), such as Regulation D in the U.S. or Reg S overseas.
The BUIDL (BlackRock) offered through Securitize is only available to U.S. accredited purchasers (a subset of accredited investors, with a minimum investment of about $5 million).
Similarly, Ondo's OUSG (Tokenized Treasury Fund) requires investors to be both accredited investors and qualified purchasers.
These are not arbitrary obstacles. They are requirements verified by the SEC under Regulation D 506(c), determining who can legally own certain types of financial instruments.
When we observe tokens designed for different regulatory frameworks, the contrast becomes more pronounced. Ondo's USDY is solely targeted at non-U.S. investors (sold overseas according to Reg S). By circumventing U.S. restrictions, it achieves a wider distribution, allowing non-U.S. individuals who complete KYC to purchase USDY. The number of USDY holders is 15,000, which, while not large, significantly exceeds the 75 holders of OUSG.
The same company, the same tokenized asset, just different regulatory frameworks. The result is a distribution difference of up to 200 times.
This is where the comparison between Augusta National Golf Club and RWA becomes precise. To achieve the aforementioned goals, the RWA token platform integrates compliance into the token code or surrounding infrastructure. Unlike freely tradable ERC-20 tokens, these tokens are typically subject to transfer restrictions at the smart contract level.
Most security tokens adopt a whitelist/blacklist model (through standards like ERC-1404 or ERC-3643), where only pre-approved wallet addresses can receive or send tokens. If an address is not on the issuer's whitelist, the token's smart contract will block any transfer to that address.
It's like a guest list executed by code. You can't just show up at the door with a wallet address and demand entry. Someone must verify your identity, check your accredited investor status, and add you to the approved list. Only then will the smart contract allow you to receive tokens.
Backed Finance's tokens come in two forms—unrestricted versions and wrapped 'compliant' tokens. Wrapped tokens 'only allow whitelisted addresses to interact with the tokens,' and Backed will automatically add users to the whitelist after they complete KYC.
Efficiency Argument
From the outside, this system appears exclusive. From the inside, it seems efficient. Why? From the issuer's perspective, given their business model and constraints, a centralized holder base is often a rational or even intentional choice.
Each additional token holder represents a potential compliance risk and extra cost, whether on-chain or off-chain. Despite these upfront compliance costs, on-chain rails bring long-term operational efficiencies, particularly in terms of instant settlement compared to traditional market T+2, automatic updates of net asset value (NAV), and programmability (such as automatic interest distribution).
By implementing tokenization and deploying distributed ledger technology (DLT), asset managers can reduce operational costs by 23%, equivalent to 0.13% of assets under management (AUM), as stated in a white paper by global fund network Calastone.
It predicts that tokenization can help average funds improve their profit and loss statements, adding between $3.1 million and $7.9 million in profits, including an increase of $1.4 million to $4.2 million in revenue through more competitive total expense ratios (TER).
The entire asset management industry can achieve a total saving of $135.3 billion in UCITS, UK, and U.S. (40 Act) funds.
By limiting distribution to known and vetted participants, issuers can more easily ensure that each holder meets requirements (accredited investor status, jurisdiction checks, etc.) and reduce the risk of tokens inadvertently falling into the hands of bad actors.
Mathematically, it also makes sense. By targeting a few large investors instead of many small investors, issuers can save on onboarding costs, investor relations, and ongoing compliance monitoring expenses. For a $500 million fund, reaching capacity through five investors each contributing $100 million is more commercially viable than through 50,000 investors each contributing $10,000. The management of the former is also much simpler. While on-chain transfers settle automatically, the compliance layer involving KYC, accredited certification, and whitelisting remains off-chain and expands linearly with the number of investors.
Many RWA token projects explicitly target institutional or corporate investors rather than retail ones. Their value propositions often revolve around providing crypto-native yield channels for fund managers, fintech platforms, or crypto funds with large cash balances.
When Franklin Templeton launched its tokenized money market fund, they did not intend to replace your bank checking account. They aimed to provide a way for CFOs of Fortune 500 companies to earn returns on their idle corporate cash reserves.
The Exception of Stablecoins
At the same time, the comparison with stablecoins is not entirely fair, as stablecoins address regulatory challenges in different ways. USDC and USDT themselves are not securities; they are designed as digital representations of the dollar rather than investment contracts. This classification is achieved through careful legal structuring and regulatory engagement, allowing them to circulate freely without investor restrictions.
But even stablecoins require significant infrastructure investment and regulatory clarity to achieve their current scale of distribution. Circle spent years building compliance systems, collaborating with regulators, and establishing banking relationships. The 'permissionless' experience that users enjoy today is built on a highly permissioned foundation.
RWA tokens face different challenges: they represent actual securities with real investment returns and are therefore subject to securities laws. Until there is a clearer regulatory framework for tokenized securities (the recently passed GENIUS Act begins to address this issue), issuers must operate within existing constraints.
Future Prospects
The current centralization of RWA tokens is, after all, the closest manifestation of traditional financial operations. Consider traditional private equity funds or bond issuances limited to qualified institutional buyers, where participation is typically restricted to a few investors.
The difference lies in transparency. In traditional finance, you don't know how many investors hold a particular fund or bond—this information is private. Only large holders are required to make regulatory disclosures. On-chain, every wallet address is visible, making centralization apparent.
Moreover, exclusivity is not a characteristic of on-chain tokenized assets. It has always been the case. The value of RWA tokenization lies in making these funds easier for issuers to manage.
Figure's digital asset registration technology (DART) has reduced loan due diligence costs from $500 per loan to $15, while shortening settlement times from weeks to days. Goldman Sachs and Jefferies can now purchase loan pools as easily as trading tokens. Meanwhile, tokenized government bonds like BUIDL have suddenly become programmable, allowing you to use these ordinary government bonds as collateral to trade Bitcoin derivatives on Deribit.
Ultimately, the noble goal of democratizing access can be achieved through regulatory frameworks. Exclusivity is a temporary regulatory friction. Programmability is a permanent infrastructure upgrade that makes traditional assets more flexible and tradable.
Returning to the Augusta National Golf Club, their controlled membership model makes the golf tournament a perfect synonym. The limited number of members means every detail can be managed precisely. Exclusivity creates conditions for excellence, but paradoxically, it also makes it more cost-effective. To provide the same level of precision and hospitality to a broader and more inclusive audience, the costs would multiply.
A controlled holder base also creates convenience for fund issuers to ensure compliance, efficiency, and sustainability.
However, the barriers on-chain are gradually lowering. With the evolution of regulatory frameworks, the emergence of wrapped products, and the maturation of infrastructure, more people will gain access to these benefits. In some cases, this access may be achieved through intermediaries and products designed for broader distribution (such as Backed Finance's unrestricted version) rather than through direct ownership of the underlying tokens.
The story is still in its early stages, but understanding why things are the way they are today is key to comprehending the shifts that are about to happen.