What does tokenisation mean for real-world assets?

A token is a record

The Bank for International Settlements (BIS) defines tokenisation as creating and recording a digital version of a traditional asset on a programmable platform.¹ A blockchain is one such platform. The BIS also warns that the word has no generally accepted definition, even inside the finance industry.¹

A digital token is an entry in a database. It can carry information, such as who owns it, and rules about how it can be used.¹ Tokens themselves are old. The BIS notes that, as early as 7500 BC, small cones, spheres and discs stood for goods in the farming economy of the time.¹

Two kinds of token

The Financial Stability Board (FSB) splits tokens into two types.³

• Tokens issued directly on a blockchain, sometimes called "native" tokens.³
• Tokens that are digital versions of assets first issued elsewhere, or of physical things.³

This module is about the second type. Firms in this market call them "real-world assets", or RWAs.^4,5 Examples include fund shares, bonds, gold and property.³

The asset stays off the chain

A tokenised Treasury bill or gold bar does not move onto the blockchain. The OECD says real assets keep existing "off-chain". Physical ones usually need to be held in custody, so the tokens stay backed.²

So other parties are still needed. The FSB says custody and redemption of tokens may need third-party service providers.³ A custodian is a firm that keeps assets safe for others.^3,1 Redemption means handing the token back for cash or for the asset.^6,3

The OECD makes a simple point. A token's credit quality can never be higher than that of the asset underneath it.²

Why do it?

Supporters argue that tokenisation could make finance more efficient, cheaper, more transparent and more flexible.³ The FSB says many of these benefits are not yet proven, and some may be possible without tokens.³

One idea is fractionalisation: splitting an asset into smaller shares, so more people can afford a piece.³ The BIS says the gains may be biggest for hard-to-sell, non-standard assets, but so are the costs.¹

How big is it?

In October 2024, the FSB said adoption was very low but appeared to be growing.³ It judged that tokenisation did not pose a material risk to financial stability, mostly because it was so small.³

The data firm RWA.xyz splits tokens into "distributed" and "represented" assets. Distributed tokens can move to wallets outside the issuer's platform, even if only approved wallets can hold them.⁷ Represented tokens can't leave the platform; the blockchain is just used to keep records.⁷

On 22 October 2026, RWA.xyz showed $39.03 billion of distributed assets and $368.13 billion of represented assets.⁵ Both figures leave out stablecoins and cryptocurrencies.⁸ Stablecoins alone came to $290.82 billion.⁵