Where did Real World Assets (RWA) come from?

RWA refers to the tokenization of real assets such as real estate, stocks, bonds, commodities, and art onto the blockchain.

The story leading to RWA:

Everything began when Satoshi Nakamoto 'gave birth' to Bitcoin in January 2009, opening an era for decentralized blockchain technology. In 2012, in 'The Second Bitcoin Whitepaper', J.R. Willett first hinted at the idea of 'tokenization' – turning physical assets into digital certificates (tokens) through the Mastercoin protocol (the predecessor of Tether today).

But perhaps it was not until 2015, when Ethereum was born with the first appearance of smart contracts, that the dream of asset tokenization truly gained a launch pad. With smart contracts, the digital representation of physical assets such as real estate, art, and commodities became feasible, narrowing the gap between the physical world and the digital world. In 2018, St. Regis Aspen Resort in Colorado tokenized 18 million USD worth of shares in this resort — one of the first Security Token Offerings (STOs). By 2019, projects in Europe like Tokeny and in the U.S. like Harbor continued experimenting by tokenizing hundreds of millions of dollars worth of land. At this stage, asset tokenization existed in the form of Security Tokens.

Since 2020, DeFi has developed strongly, and the concept of 'Real World Assets' has started to be mentioned more frequently. In 2020 and 2021, famous DeFi projects like MakerDAO, Aave, and Compound began introducing RWA as collateral assets to expand their lending business.

In the period of 2022-2023, macro factors have driven a wave of interest in RWA (Real World Assets). Rising US Treasury bond yields have made traditional yields more attractive compared to yields in DeFi (crypto yield), prompting investors to seek safer profit channels. At the end of 2022, a series of new RWA platforms (like OpenEden, Ondo, Backed Finance) emerged, focusing on tokenizing US government bonds. This created a boost for the RWA narrative: traditional assets on-chain with more stable yields.

From 2024 to now, after the Bitcoin Spot ETF was approved and the interest of large organizations in blockchain increased rapidly, Real World Asset has exploded strongly. BlackRock, the world's largest asset management company, announced a partnership with Securitize to develop the RWA fund - BlackRock USD Institutional Digital Liquidity Fund (BUIDL), primarily investing in US Treasury securities. J.P. Morgan continues to develop the Blockchain Onyx project (now renamed Kinexys), focusing on tokenizing traditional financial assets like bonds and real estate. Mastercard collaborates with Polytrade to tokenize assets like bonds, trade credit, and real estate to increase liquidity and accessibility.

Why is there so much interest in Real World Assets?

Real World Assets offer many outstanding benefits.

The narrative about Real World Assets (RWA) is attracting great interest in the financial and crypto community for many reasons, primarily its ability to address the inherent limitations of traditional financial markets.

One of the biggest limitations is the lack of liquidity of many asset types, especially assets like real estate, commodities, and artworks. In the traditional market, buying and selling these assets often takes a long time, incurs high costs, and is complex in terms of procedures. Moreover, the traditional ownership model often requires a significant initial capital, making it difficult for retail investors to participate in these markets.

Tokenizing RWA effectively addresses these limitations:

  • Easy access: Fractional ownership is one of the most important benefits, allowing retail investors to buy and own small portions of high-value assets that they previously could not access. Besides, by operating on the blockchain, RWA can reach the global market and operate 24/7, overcoming geographical and temporal barriers of traditional markets.

  • Increased liquidity: By making access easier and attracting inflows from more investors, RWA increases liquidity for assets that are hard to trade.

  • Transparency and security: Blockchain ensures that all transactions are recorded on a public, immutable ledger, increasing reliability.

  • Cost reduction: Thanks to transparency and security, RWA also helps eliminate transaction intermediaries, significantly reducing transaction costs compared to traditional methods.

Real World Assets have significant growth potential.

According to data from the rwa.xyz website, excluding stablecoins, the two most tokenized asset types are Private Credit - these are direct loans between investors and businesses (not through banks or public markets), US Treasury Debt - US government bonds, and Commodities - physical assets like gold, oil, and agricultural products. Regarding the scale of these two fields:

  • According to McKinsey's analysis, the total value of Private Credit by the end of 2023 is nearly 2 trillion USD.

  • According to data from Fiscal Data - the official website operated by the U.S. Department of the Treasury, providing public and transparent data on U.S. federal finances, the total U.S. government debt is approximately 32.6 trillion USD (of which 28.91 trillion USD is held by the public).

It can be seen that the scale of the two asset types, Private Credit and US Treasury Debt, is very large. Meanwhile, the amount of tokenized assets of these two assets to date is still less than 20 billion USD. Thus, the RWA field is currently still very small and has much room to expand.

Moreover, the potential assets for tokenization are very diverse and not limited to just Private Credit or US Treasury Debt. The image below lists the types of assets that can be tokenized.

Interest from large organizations

Another important factor driving interest in the RWA narrative is the increasing acceptance from institutional investors:

  • BlackRock: In March 2024, BlackRock launched the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain. This tokenized fund primarily invests in US Treasury securities. Currently, this fund has a capitalization of 2.87 billion USD.

  • Franklin Templeton is one of the pioneers in the RWA field. In 2021, they launched the Franklin OnChain US Government Money Fund, an investment fund that uses blockchain technology to process transactions and record ownership of shares. By February 2025, this fund expanded its operations to institutional investors in Europe and manages a total asset value of over 580 million USD.

  • UBS, Switzerland's leading banking group, also entered the market by launching a tokenized money market investment fund called the USD Money Market Investment Fund Token (uMINT) on the Ethereum blockchain in November 2024. This move aligns with UBS's strategy to integrate blockchain technology into asset management services, offering clients innovative investment solutions.

  • Franklin Templeton is a pioneer in the RWA field. In 2021, they launched the Franklin OnChain US Government Money Fund, an investment fund that uses blockchain technology to process transactions and record ownership of shares. By February 2025, this fund expanded its operations to institutional investors in Europe and manages a total asset value of over 580 million USD.

  • UBS, Switzerland's leading banking group, also entered the market by launching a tokenized money market investment fund called the USD Money Market Investment Fund Token (uMINT) on the Ethereum blockchain in November 2024. This move aligns with UBS's strategy to integrate blockchain technology into asset management services, offering clients innovative investment solutions.

Market reality, since the drop to support at 74,500 USD in early April, Bitcoin has recovered and reached a new peak at 112,000 USD. The price chart has maintained a bullish wave pattern. The inflow of funds into Bitcoin Spot ETFs has turned strongly positive for many consecutive days, and the total inflow has reached a new high. The accumulation trend is returning strongly.

The combination of the demand to address existing issues in traditional finance and the attractive benefits that RWA brings has created a strong momentum for the interest and development of this narrative. Investors and organizations are increasingly realizing that RWA is not just a new technology but also a practical solution to many challenges in the financial industry. The ability to split ownership and increase liquidity is particularly appealing in the context of a globalized market and diverse investment needs.

What will the Real World Asset landscape look like in the next 5 months to 1 year?

Considering the macro picture

On the macro side, trade tensions from the tariff war create an unstable global economic situation, with no clear end in sight. The real Gross Domestic Product (GDP) of the U.S. fell by 0.3% in the first quarter of 2025, which is bad news in the short term but creates momentum for the FED to cut interest rates. If the FED does indeed implement the expected interest rate cuts, it will create a positive sentiment for the market. We might see money flowing back into financial markets and crypto.

Market reality, since the drop to support at 74,500 USD in early April, Bitcoin has recovered and reached a new peak at 112,000 USD. The price chart has maintained a bullish wave pattern. The inflow of funds into Bitcoin Spot ETFs has turned strongly positive for many consecutive days, and the total inflow has reached a new high. The accumulation trend is returning strongly.

President Trump, after being elected, also strongly promoted building a legal corridor for crypto and supporting the development of this sector. Currently, crypto projects have a better legal environment to thrive.

All of this holds a higher potential for the market scenario to enter a growth phase in the second half of 2025. The possibility of an Altcoin season still appearing is not ruled out, just a bit later compared to previous cycles.

Considering the growth rate of RWA

Looking at the chart below, we see:

From 2023 to 2024, the value of RWA assets (excluding stablecoins) has increased by 65.19%.

From 2024 to 2025, the value of RWA assets (excluding stablecoins) has increased by 82.77%.

From the beginning of 2025 to now (May 2025), the value of RWA assets (excluding stablecoins) has increased by 40.76%.

We see that the growth rate of the total value of tokenized assets (excluding stablecoins) is increasingly accelerating, the graph is trending steeper. Since the beginning of 2025, only 4 months have passed, and the total value of RWA has increased by 40.76%. If this growth rate continues, it is estimated that by the end of 2025, the annual growth will be about 119%, reaching approximately 34.4 billion USD.

Considering the development of infrastructure

Currently, most RWA is still being deployed on the Ethereum network and its Layer 2 solutions (as seen in the two statistics below). Meanwhile, in 2025, Ethereum is expected to have two upgrades: the Pectra upgrade (May 7, 2025) and Fusaka (late 2025), promising to improve performance and user experience on both Layer 1 and Layer 2. Currently, the Pectra upgrade has been successfully implemented, and Fusaka is expected to take place at the end of this year or early 2026. Thus, the infrastructure will be further upgraded to meet higher demand.

Conclusion

In a macroeconomic situation that is unstable with trade tensions, the growth rate of RWA assets is still very fast and shows no signs of slowing down. Moreover, the legal environment is becoming increasingly favorable, and large organizations are gradually gearing up to exploit this market (as mentioned in the section 'Real World Assets with great growth potential' above). The infrastructure is being upgraded better with a more user-friendly experience for newcomers. Thus, in the next 5 months to 1 year, the Real World Asset field will certainly develop even stronger.

In a market condition that will only continue to trend sideways, the scale of tokenized assets outside of stablecoins could increase to 35 - 50 billion USD. In a positive scenario, if the FED lowers interest rates, and the financial market in general, and crypto in particular, truly enters an uptrend, the trend of tokenizing real assets could explode even more. RWA products related to US Treasury Debt may face certain limitations in overall growth due to cooling interest rates, but other RWA products like stocks or real estate may emerge more strongly and explosively.

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