Globally, attitudes are shifting and becoming more favorable towards crypto, and one of the main reasons for this change is thought to be the emergence of tokenized real-world assets, which help to bring traditional financial assets on-chain.
Called RWAs, they enable things like real estate to be traded in the same way as Bitcoin. With tokens, investors can own a fraction of a high-value asset such as a castle or a Monet painting without putting up millions in capital.
Traditional financial powerhouses in the U.S, such as BlackRock and Franklin Templeton, have made headlines for throwing their weight behind RWAs, but this movement is actually occurring on a much bigger, global scale. Indeed, globally, the value of RWAs has already surpassed more than $10 billion.
So let’s take a closer look at some of the biggest players in these emerging RWA markets.
Saudi Arabia
Surprisingly, the conservative kingdom of Saudi Arabia has positioned itself as one of the most enthusiastic supporters of RWAs. It has just kicked off a new initiative that aims to accelerate blockchain and AI adoption across the Middle East and Africa regions.
The Saudi Arabia AI and Blockchain Centre, known as SAAIBC, was created in partnership with a startup called COTI, with the aim being to merge traditional finance with blockchain-based economics.
Saudi Arabia is already a big believer in technology, with its famed Vision 2030 fund dedicated to transforming the country into a global AI powerhouse, aided by a $40 billion Public Investment Fund. SAAIBC believes that the Middle East and Africa are ripe for a blockchain-based revolution, as it sees the technology as the perfect foil for AI-led innovation. By combining AI with blockchain, it can lead to endless possibilities for the automation of more efficient, tokenized financial economies.
COTI’s role in the partnership is to ensure privacy for SAAIBC’s tokenization infrastructure, enabling the compliance that’s necessary to support institutional adoption.
Dubai
It was no accident that SAAIBC first announced itself to the world during the Real-World-Asset Summit in Dubai earlier this year, for the city has become another staunch supporter of tokenization and RWAs.
Dubai has firmly established itself as one of the world’s foremost hubs for Web3 and blockchain technologies, fostering a welcoming regulatory climate that has encouraged hundreds of startups to flock to the country. Some of the crypto industry’s biggest names have established their regional headquarters in Dubai, and the city is believed to host more than 1,000 blockchain startups in total, with many of them being laser-focused on RWAs. It’s also a regular host of blockchain-focused events.
The city has also embraced local tokenization initiatives, with the Dubai Land Department spearheading a Real Estate Tokenisation Project that aims to diversify property ownership by enabling multiple investors to become co-owners of properties.
USA
We cannot ignore the USA, where the aforementioned institutional giants like BlackRock and Franklin Templeton have already brought billions of dollars in value on-chain.
BlackRock is a global name and it has done wonders in terms of bringing more attention to the idea of tokenization. It first launched the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, on the Avalanche blockchain in March 2024, backed by cash, U.S. Treasury bills and repurchase agreements. Since then, it has amassed more than $2.5 billion worth of assets under blockchain management.
Franklin Templeton is perhaps even more invested in blockchain, with its tokenized money fund recently being expanded to Coinbase’s Layer-2 network Base, in addition to earlier deployments on Ethereum, Stellar, Polygon and Arbitrum.
Known as FOBXX, the Franklin OnChain US Government Money Fund boasts more than $435 million in assets under management, and has been generating monthly returns of around 4.7% since its launch in 2021.
Singapore
Singapore has earned itself a reputation as another of the world’s most pro-crypto countries, and it’s now looking to take a leading role in the global push towards tokenization, partnering with dozens of traditional financial giants to do so.
Last November, the Monetary Authority of Singapore (MAS) announced an expansion of Project Guardian, an initiative launched in 2022 that’s aimed at scaling and growing the adoption of tokenized markets.
The Southeast Asian city state kicked off Project Guardian with five pilot projects, including one that sees Citi team up with T Rowe Price and Fidelity International. They’re exploring ways to use blockchain to price and execute digital asset trades more efficiently, along with enhancing real-time, post-trade reporting.
The financial services giant Ant Group is involved in a different project that’s testing out a blockchain-based treasury management system for clearing and settlements using tokenized assets, while BNY Mellon and OCBC Bank are partnering on a tokenized, cross-border foreign exchange product.
Other projects include Franklin Templeton’s experimental tokenized money market fund. Finally, JPMorgan Chase and the asset manager Apollo are exploring how digital assets can be used to facilitate more seamless investing and portfolio management, including automated rebalancing. The goal of the project is to eliminate the manual processes involved in traditional asset servicing.
Project Guardian has also created a number of frameworks for tokenized economies. These include the Guardian Fixed Income Framework that integrates international standards within a guide for creating tokenized debt capital markets, and a Guardian Funds Framework, which recommends best practices for fund tokenization.
European Union
Europe’s Markets in Crypto-Assets (MiCA) regulation came into effect in December 2024, and it has made a lot of headlines for the way it legitimizes digital assets. The regulation was primarily designed to establish a legal framework for crypto services providers and token issuers in the European Union, and it also serves as the basis of regulatory compliant tokenized assets.
With MiCA, Europe has taken a major step forward towards creating a safe, regulated environment for tokenized assets, paving the way for more institutional investors to get involved.
Among other things, MiCA lays down comprehensive legal standards for digital token issuers, including mandatory disclosures, while mandating that stablecoin issuers maintain reserves to back up their circulating supply and meet strict liquidity standards.
It also enhances consumer protection by promoting increased transparency around tokenized assets, though on the downside, it has been criticized for increasing the regulatory burden of crypto and DeFi startups.
That said, the response to MiCA has largely been positive, and it’s expected that the framework will boost Europe’s status as a leader in the race towards tokenizing the financial economy.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.