Real-world assets (RWA) and tokenisation

Real-world assets (RWAs) in crypto are traditional financial or physical assets, such as government bonds, money-market funds, private credit, real estate or gold, that are represented by tokens on a blockchain. Tokenisation is the process of creating those tokens.

Supporters argue tokenisation can make assets easier to trade, settle almost instantly, divide into small fractions and use as collateral in DeFi. Tokenised US Treasury funds grew rapidly from 2023, with large asset managers such as BlackRock (through its BUIDL fund) and Franklin Templeton entering the market. Gold-backed tokens such as PAX Gold and Tether Gold are older examples.

An RWA token is only as good as the legal structure behind it. You are relying on an issuer, custodian and legal agreements, not just code, so issuer failure, frozen redemptions and regulatory action are real risks. Many RWA products are restricted to accredited or non-US investors and require KYC.