Reviewing 14 Years of RWA: From Colored Coins Concept to Trillion-Dollar Market

The winter of STOs, BlackRock's entry, and regulatory games—a journey of tokenization that spans two generations of practitioners.

Written by: Seth

Compiled by: Luffy, Foresight News

In March 2012, Israeli developer Yoni Assia proposed the concept of colored coins: marking specific bitcoins to represent real-world assets such as stocks, bonds, and property certificates.

Unfortunately, this concept never progressed beyond the white paper stage. However, it raised a question that many have continued to explore over the next fourteen years: how to enable illiquid physical assets to circulate as freely as cash.

Fourteen years later, excluding stablecoins, the market for freely tradable tokenized assets has reached $38.29 billion, with a committed investment scale of $369.44 billion and a total of 1.79 million holders.

This article systematically outlines the complete stages of tokenization development to date and analyzes why this journey has been so long.

What is Asset Tokenization

Tokenized assets are debt certificates for real-world assets, with underlying assets that can include short-term treasury bills, gold bars, credit, and hotel equity, carried in the form of on-chain tokens.

Tokens themselves have no independent value. Real assets are held off-chain by custodians, fund managers, or trust entities, which recognize the tokens as valid certificates for extracting the underlying assets, maintaining a relationship akin to stock certificates, bearer bonds, and their corresponding underlying assets.

The incremental value brought by blockchain is limited but real: it records debt ownership, allowing ownership transfers to be completed in seconds without the need for intermediary brokers to facilitate transactions. Stripped of its technological shell, this is an old financial concept; the true innovation lies in transaction speed, asset participation, and the way assets are utilized.

Early Builders and Initial Challenges

Before the industry believed that tokenization could be scaled, a few pioneers had to prove its feasibility. In 2017, Lucas Vogelsang and Martin Quensel founded Centrifuge. In its first four years, the team focused on the Tinlake system, providing financing services for real-world receivables and physical assets through a tiered revolving fund pool.

In mid-2021, Centrifuge launched the first RWA fund pool connected to MakerDAO (now the Sky ecosystem), minting the first batch of DAI backed by real assets, and the plan was successfully implemented.

A similar model also appeared in the real estate sector. In October 2018, real estate operating company Elevated Returns completed an $18 million financing round, tokenizing 18.9% equity of the Aspen Regis Hotel, valued at $224 million, and issuing $1 face value tokens to qualified investors through Templum Markets. This was also the first large-scale commercial real estate tokenization transaction on the blockchain.

A few months later, 31.6% equity of a $5.6 million Andy Warhol painting was tokenized and auctioned in the same manner.

Both transactions were successfully issued as planned, but subsequently stalled. After the tokens were minted, the market lacked trading counterparts, making liquidity a distant prospect.

In September 2019, Paxos launched PAXG, the first gold token approved by New York financial regulators. That same year, Tether launched XAUT, competing with Paxos' gold products stored in the Brink's vault in London, backed by Swiss treasury reserves. At that time, neither product attracted significant institutional interest. Seven years later, both are still operating normally, with market capitalizations of $1.9 billion and $2.7 billion, respectively. This also proves that the commodity tokenization model was already viable before the wave of treasury tokenization began.

Regulatory rules have lagged far behind innovation. In 2017, the U.S. Securities and Exchange Commission released the DAO Report, applying the Howey Test for the first time to determine whether digital tokens are securities: the determination depends on the method of issuance, not the name of the token.

This conclusion gave rise to the security token offering (STO) track, while establishing a barrier to entry limited to accredited investors. Over the next four years, issuers continued to launch various STO products, but legal restrictions prevented the vast majority of potential traders from entering the market. Issues such as thin order depth, mandatory lock-up periods, and vague custodial regulations caused this wave to essentially end in 2021. In the same year, the peak number of active users on the prediction market Augur was only 265, which later shrank to 37.

Long-Term Challenges Facing the Industry

Various assets continue to be tokenized, but the vast majority of tokens remain dormant and are not traded. According to Forbes data, currently, 88% of the RWA market value is concentrated in 62 asset subjects; only five products—Figure Housing Credit Fund, Circle's USYC, Tether Gold, BlackRock's BUIDL, and Justokenglobal's JMWH Fund—account for nearly half of the total market size.

The vast majority of tokens are forgotten by the market after minting. Even within the top assets, which have a concentration of 88%, less than 10% of the tokenized value is actively utilized as DeFi collateral or in lending cycles.

The root of the problem is not a lack of demand. As early as 2024, capital was eager to allocate tokenized treasury bonds and gold. The real obstacle is that unless there are trusted licensed institutions to handle custody, asset transfers, and compliance processes, no institution is willing to endorse such assets. Before BlackRock's entry, no credible entity had verified this business model at a significant scale.

How Tokenization Can Achieve Breakthroughs

What the tokenization industry lacks is not better products, but a giant that is widely trusted by other institutions and willing to publicly endorse this track.

In March 2024, BlackRock provided this answer by launching the BUIDL tokenization fund, with compliance platform Securitize responsible for tokenization and operational management. Securitize was founded by Carlos Domingo and Jamie Finn in 2017.

Carlos Domingo previously operated the early security token fund SPiCE VC, which was a significant reason BlackRock chose to collaborate with Securitize.

Today, BUIDL is issued across 10 public chains, with a scale of $2.8 billion, custodied by BNY Mellon and audited by PwC, with a 7-day yield of 3.42%. BlackRock's entry has prompted the boards of major asset management institutions to take tokenization seriously—an effect that the four-year STO wave has never achieved.

Supplementary Background: Franklin Templeton's BENJI fund launched on Stellar in April 2021, being the first U.S. registered public fund to use a public chain as its official accounting system, three years earlier than BUIDL. Currently, the fund operates across multiple chains: the EVM version iBENJI deployed on BNB Chain and Ethereum has a scale of $1.72 billion, while the native Stellar token has a scale of $712.5 million.

Credit and Yield Infrastructure

After the top-level asset packaging scheme is formed, the mid-level of the industry needs a trading market that matches borrowers and lenders. In 2019, Sid Powell and Joe Flanagan launched Maple Finance, which faced significant setbacks during its development.

In December 2022, borrower Orthogonal Trading concealed its risk exposure in the FTX crash, resulting in a $36 million loan default. Within a week, the platform's active loan scale shrank by about 30%. Powell expressed that he was "shocked and disappointed" and rebuilt the platform's risk control based on this crisis: broadening the borrower admission criteria and no longer relying solely on agents to report risk exposure.

As of now, Maple has issued loans totaling over $20 billion, with its syrupUSDC and syrupUSDT products totaling $1.9 billion, making it the leading tokenized private credit platform.

Two years later, Nathan Allman, a senior practitioner in digital assets at Goldman Sachs, founded Ondo. The core product, OUSG, is the first tokenized government bond that can be transferred peer-to-peer, while USDY is the first yield-bearing stablecoin with no entry barriers. Currently, USDY has a scale of $2.145 billion, and OUSG has a scale of $449 million. Ondo is also the largest on-chain distribution channel for BUIDL. Unfortunately, founder Nathan Allman passed away unexpectedly in May 2026.

Oracles and Data Infrastructure

On-chain smart contracts can reliably read off-chain asset prices and net asset values (NAV) of funds, which is the foundation for all applications. Currently, the market is mainly divided among four major networks:

RedStone: In March 2025, Securitize selected RedStone as its core oracle partner. Today, RedStone provides daily NAV data streams for all Securitize tokenized funds, including BUIDL, Apollo ACRED, VanEck VBILL, and Hamilton Lane SCOPE. Before integration, the tokens issued by Securitize lacked real-time pricing ------ while fund shares existed on-chain, lending protocols could not obtain real-time valuations. With RedStone's price feeds, ACRED can generate yields on Morpho, and VBILL can serve as collateral on Euler. Currently, RedStone secures on-chain assets worth approximately $6 billion across 110 blockchains, with the vast majority serving institutional fund pricing rather than native crypto tokens.

Pyth Network: Targeting another end of the market, it emphasizes speed and simplifies complex NAV calculations. Using a pull model, it adapts to high-frequency trading targets: stocks, forex, and commodities, supporting over 750 US stock trading pairs and multi-term government bond interest rate data. Ondo uses Pyth to provide quotes for USDY yield tokens, covering 65 blockchains. Even without Securitize's tech stack, Ondo's government bond products have independent and reliable price data sources.

DIA: Focused on verifiability and full-chain transparency from data sources to contracts. The xReal suite covers over 100 RWA price indicators, including stocks, ETFs, forex, and bond yields. Stellar and Ripple have both chosen DIA for advancing RWA collaborations. Institutions prefer complete audit data source logic in compliance processes rather than relying solely on brand endorsements, and DIA precisely matches this need.

Chainlink: Engaging in data transmission and asset interoperability across untrusted blockchains, which the other three do not cover, and is not directly responsible for fund pricing. Its CCIP channel distributes DTCC smart net asset value data, supporting the SWIFT and UBS pilot in Singapore's "Guardian Project." This project started in May 2022 and completed UBS's first tokenized fund real pilot in October 2023. Last quarter, CCIP's cross-chain transfer scale reached $4.9 billion, a 353% year-on-year increase, securing a total asset value of $110 billion across the network. Just the Mantle public chain has seen over $2.5 billion in token flow through CCIP this year. DTCC is embedding Chainlink's infrastructure into its collateral application chain, aiming for a launch in Q4 2026.

Building Distribution Channels

Asset packaging and market distribution are two completely independent topics.

The Mantle network evolved from BitDAO. BitDAO received strong support from the exchange Bybit, and at its peak, its treasury size rivaled that of the Ethereum Foundation. In 2023, BitDAO merged into Mantle, fully taking over treasury assets, holding nearly $300 million in stablecoins and 270,000 ETH at that time, and now the treasury has expanded to $2.4 billion. The majority of funds that most startup teams would take years to secure were already available to Mantle at its inception. Currently, Mantle has launched over 155 tokenized stocks, with DeFi liquidity exceeding $1 billion. On August 6, leveraging CCIP to build channels, Mantle expanded its RWA infrastructure to Solana, marking the first ecological output to a non-native public chain.

Coinbase and Binance focus on collateral and asset aggregation tracks. BUIDL has landed on the BNB chain and can directly serve as collateral on Binance.

MEXC is one of the most comprehensive trading platforms, launching over 105 Ondo tokenized stock trading pairs, while also supporting PAXG, XAUT, and mainstream RWA infrastructure tokens. In August alone, it added five new targets covering AI infrastructure and rare earth sectors. In Q1 2026, the platform accounted for 27% of global tokenized gold trading volume, ranking second globally. This month, MEXC upgraded its RealStocks product, covering over 7,000 US stocks and ETFs through broker partnerships, with new features allowing token holders to fully correspond to real shareholder rights.

The fastest-growing categories are not limited to spot market listings; Hyperliquid and Binance's RWA perpetual contracts saw a weekly trading volume of $61.7 billion at the end of July, equivalent to 99.2% of the trading volume of Bitcoin perpetual contracts on both platforms during the same period, with tokenized stocks accounting for 58%. On Hyperliquid, RWA perpetual trading volume has already surpassed the total of all other categories on the platform.

Regulatory Progress Keeping Pace with Innovation

On the regulatory front, four main lines are advancing simultaneously:

• The "GENIUS Act": The first federal stablecoin bill in U.S. history was signed into law on July 18, 2025.
• The "CLARITY Act": Aims to establish market rules for the remaining assets in the crypto industry. The bill passed the House a day earlier and was approved by the Senate Banking Committee with a vote of 15:9 in May 2026. It later became stalled: Democrats demanded the addition of public officials' digital asset conflict of interest clauses, while Republicans wanted to remove related content to advance legislation. The Senate went into recess on August 8 without a final vote. However, Senate leader Schumer submitted a motion to end debate before the recess, scheduled for procedural voting on September 15 (the day after lawmakers return). This vote does not equate to the bill's passage but represents the start of full chamber debate. Senate staff have revealed that the conflict of interest clause controversy remains unresolved. If it is postponed again in September, the midterm election schedule will significantly compress the remaining legislative window for this year.
• The SEC chooses an independent path. In March 2026, the SEC and the Commodity Futures Trading Commission jointly released a token classification framework, categorizing digital assets into five categories, with only "digital securities" fully under SEC regulation. SEC Chairman Paul Atkins stated in April at the Washington Economic Club that the regulatory agency is "about to release" innovation exemption rules and establish a regulatory sandbox. Companies can trade tokenized securities on-chain for 12 to 36 months without completing the full registration process. Bloomberg reported in mid-May that the policy was about to be implemented; on May 22, the SEC postponed progress, listening to objections from exchanges regarding investor protection. As of mid-June, the latest news is that this exemption plan has not yet been officially released.
• Nasdaq, the NYSE, and DTCC choose not to wait any longer. The SEC approved Nasdaq's rule amendments in March 2026, allowing Russell 1000 constituents and index ETFs to conduct tokenized trading based on existing traditional trading infrastructure; a similar plan for the NYSE was approved in April. The DTCC, which manages assets worth approximately $114 trillion, announced on May 4 that it would launch production-grade pilots in July 2026, with participation from over 50 institutions, including BlackRock, JPMorgan, and Goldman Sachs, covering Russell 1000 constituents, mainstream index ETFs, and U.S. Treasury bonds, with plans for full promotion in October. This system retains all traditional rights, such as shareholder voting and dividends, while the core securities registration system remains unchanged, and tokens are merely the packaging carrier for settlement records.

The SEC's postponed exemption plan would originally open a second, more lenient channel: tokens could be issued without authorization from the underlying listed companies, and investors would only enjoy economic benefits without shareholder rights. Whether and when this second channel will be implemented remains uncertain. However, the DTCC pilot alone is enough to prove that compliant tokenized trading of mainstream U.S. stocks will inevitably come.

Has the Liquidity Problem Been Solved?

Reviewing the industry pain points mentioned earlier, the liquidity fragmentation issue has been partially alleviated. The liquidity in the government bond and private credit sectors is relatively sufficient, with scales of $16.2 billion and $7.3 billion, corresponding to 87 and 2,543 underlying assets, respectively.

However, liquidity in other sectors remains weak (most categories have scales below $1 billion). The custody trust issues for institutions like BlackRock and Franklin Templeton have been resolved, but small and medium issuers still face challenges. Approximately 97% of tokenized assets still set entry barriers, preventing ordinary retail investors from participating, with the root of the barriers traceable to the SEC's Howey Test determination standards from 2017.

The above is a relatively optimistic perspective. In July 2026, BeInCrypto Intelligence released a report based on data from RWA.xyz on over 7,000 tokenized products, revealing a harsher reality: among tokenized assets with a market value exceeding $100,000, 56% (approximately $32.9 billion) had zero on-chain transfer records in a single week. Asset on-chain and asset circulation on-chain are two completely different things. Currently, the industry has only completed the first step.

Some phenomena belong to the original product design intention: buying tokenized government bonds to obtain yields does not require daily trading like speculative bonds. However, the objective reality cannot be avoided, as the market shows a clear concentration at the top. Five major products account for nearly half of the market value, while the remaining over 6,000 targets remain largely dormant.

Future Directions

Major institutions have vastly different predictions for market scale, but there is consensus on growth direction. McKinsey's baseline scenario predicts that the scale of tokenized assets will reach $2 trillion to $4 trillion by 2030; Ark Invest predicts $11 trillion; Boston Consulting Group, in collaboration with Ruiying, predicts $9.4 trillion by 2030, rising to $18.9 trillion by 2033; Standard Chartered predicts it will exceed $30 trillion by 2034.

The numerical gap is essentially not a disagreement on whether growth exists; everyone anticipates that the market size will expand a hundredfold compared to the current state. The divergence arises from statistical criteria: whether stablecoins are included, whether bank deposits are included, and how the boundaries of tokenization definitions are delineated.

Institutions acknowledge growth expectations while remaining cautious. A survey conducted by Coinbase and Ernst & Young in January 2026 among 351 institutional decision-makers revealed that 73% plan to increase their allocation to digital assets within the year, and 65% list regulatory clarity as a primary driving factor. Meanwhile, 66% of respondents also identified regulatory uncertainty as the biggest risk. The core conditions for driving capital into the market remain unresolved.

Another Ernst & Young survey shows that institutions are unwilling to wait for regulatory clarity: 83% of institutional investors plan to allocate to tokenized bonds by the end of 2026, up from just 33% two years ago.

The shift is already reflected in the underlying infrastructure, not just in survey responses. In February 2026, BUIDL integrated with UniswapX for direct trading; in March, it connected with the Chronicle verification system, allowing anyone to verify BlackRock's underlying treasury holdings in real-time based on records from Bank of New York Mellon. The Sky ecosystem's Spark liquidity layer automatically allocates $1.5 billion in funds, switching between BUIDL, Anemoy, and Superstateinc, directing resources to the highest-yielding targets—this type of work previously relied on manual operations by capital traders.

Andrei Grachev, founder of DWF Labs, believes that tokenized stocks have reshaped trader behavior. Crypto investors can switch their stock asset allocations without leaving their existing trading platforms, predicting significant growth in on-chain stocks and commodities this year. Artem Tolkachev from Falcon Finance straightforwardly explained this mechanism: composability and redemption mechanisms are essential to truly bridge physical assets with crypto liquidity.

The industry is diverging into two development paths: one prioritizes compliance with ownership, building access channels, and ensuring that tokens operate within compliance boundaries; the other prioritizes composability, packaging compliant assets like BUIDL to allow free circulation in permissionless DeFi ecosystems.

This can be seen as a contest between RWA 1.0 and RWA 2.0, but it is no longer a theoretical discussion; it has become two competing product roadmaps. Earlier this year, Circle's USYC surpassed BlackRock's BUIDL in scale, becoming the largest tokenized treasury fund, indicating a temporary advantage for the latter in distribution, though brand influence is another matter.

RWA 1.0: Purely mapping physical assets, supporting only buy, hold, and redeem actions; examples include Aspen Ridge Hotel tokens and early lending pools from Maple. RWA 2.0: Enabling physical assets to continuously generate utility. In the second quarter of 2026, the scale of tokenized real assets deposited in various DeFi platforms reached $7.4 billion, more than doubling year-on-year, with yield-bearing stablecoins and tokenized treasury bonds making up the largest share. Maple's syrupUSDT has officially launched on Aave via Mantle, marking the establishment of a real funding circulation infrastructure.