Over the past few years, tokenization has moved from niche blockchain jargon to a mainstream financial strategy.
Google Trends data shows that searches for “Tokenization” and “RWA” have recently reached all-time highs, reflecting the surge of global interest in this shift.
It’s not just retail curiosity driving this momentum. Today, major global institutions and Wall Street giants like BlackRock and JPM are betting on tokenization and racing to explore how real-world assets can be recorded, divided, and traded on blockchains.
๐กStablecoin Surge Signals What’s Next for RWAs
Currently, one of the fastest-growing segments in the RWA space is fiat-backed stablecoins. The stablecoin market cap nearly doubled between 2024 and 2025—from about $131 billion to over $271 billion. Momentum continues to build, with Japan even announcing plans to launch a yen-backed stablecoin later this year.
This stablecoin surge signals a major flow of capital from traditional finance into blockchain-powered decentralized finance, fueling deeper onchain liquidity. This means more and more users are onboarding into DeFi, and stablecoins are providing the necessary liquidity for broader adoption of RWAs.
The next step is expanding beyond currency into previously illiquid alternative assets such as real estate, private equity, and vehicles.
Tokenization rewrites the old playbook of alternative investments. By digitizing ownership and enabling fractional participation, it transforms illiquid, high-cost assets into accessible investment opportunities that can be traded and tracked globally with far less friction.
This is why many describe RWA tokenization as the next trillion-dollar wave in finance.
Don’t sleep on this new era of tokenization. Read on to see why it matters.
Global Financial System: TradFi & DeFi
To understand the importance of tokenization, it helps to look at the bigger picture of global finance.
Broadly, the financial system can be divided into two worlds: Traditional Finance (TradFi) and Decentralized Finance (DeFi).
Traditional Finance (TradFi) refers to the conventional financial systems and instruments most people use every day.
It includes:
- Banking: loans, savings, mortgages
- Securities: stocks, bonds
- Alternative investments: hedge funds, real estate, vehicles
TradFi relies on central authorities such as banks, brokers, custodians, and regulators, to validate and process every transaction. These intermediaries provide oversight and legal protection but also make the system slow and costly. Settlement can take days, and participation often comes with considerable barriers.
Decentralized Finance (DeFi) is a new model of finance built on blockchain. It enables peer-to-peer transactions through smart contracts, removing the need for central intermediaries.
DeFi mirrors many categories of TradFi, such as:
- Lending protocols: decentralized borrowing and lending
- Stablecoins: digital tokens pegged to fiat currencies
- Real-world assets (RWAs): tokenized real estate, treasuries, vehicles
In the DeFi ecosystem, users can seamlessly buy and sell RWA tokens without relying on middlemen, cutting both transaction time and fees. This efficiency makes RWAs far more attractive compared to alternative investments in TradFi.
In this blog, we’ll explore how tokenization is transforming alternative investments from TradFi into DeFi, lowering barriers, improving liquidity, and opening access to a global pool of investors.
What Are Alternative Investments?
Alternative investments are assets outside the usual categories of stocks, bonds, or cash. They cover a wide range:
- Real estate
- Private equity
- Venture capital
- Infrastructure
- Vehicles
- Collectibles
In TradFi, these opportunities were limited and concentrated to large institutions and seasoned investors due to high entry costs and complex processes. Also, they require expertise and careful due diligence, as each asset class carries its own risks and unique characteristics.
Yet despite these barriers, alternative investments remain attractive. They can improve a portfolio’s risk-adjusted returns by adding diversification, delivering capital growth or income streams that don’t always move in sync with the stock market.
Why Consider Alternative Investments?
Securities, such as bond and stocks, are relatively accessible, highly liquid, and easy to trade through regulated traditional exchanges.
A person with a brokerage account can buy or sell shares in seconds during the working hours. Their performance is usually tied to market cycles, interest rates, and broad economic indicators.
Alternative investments, by contrast, are less liquid and harder to access.
Buying a piece of real estate or participating in a private equity fund requires much larger commitments and longer holding periods. Their value depends on the performance of the underlying asset: rent from a property, the growth of a startup, or revenue from operation.
Because they are less connected to public markets, alternatives are attractive for diversification. They move differently than stocks and bonds and can act as a buffer in volatile times.
Barriers to Alternative Investments
Despite their potential, alternative investments remain difficult for most individuals to access. Three barriers stand out: complexity, liquidity, and transparency.
1. Complex process
One major challenge lies in the way alternative investments are structured and managed. Setting up a private equity fund, real estate, or infrastructure deal typically requires a chain of intermediaries: fund managers, custodians, brokers, legal advisors, auditors, and settlement agents.
Each plays a role in sourcing, structuring, and maintaining the deal, but together they add layers of cost, complexity, and delay. The process is still heavily manual, relying on paperwork, complex contracts, and lengthy settlement cycles. Compared to simply buying or selling a stock on an exchange, alternatives are slow and expensive to execute.
2. Liquidity
Capital invested in private equity, infrastructure, or venture funds can be locked away for five to ten years. Exiting early, if possible, usually comes at a discount. High minimum investment thresholds, often in the hundreds of thousands, also shrink the pool of buyers and sellers.
3. Transparency
Unlike public markets where prices are updated by the second, alternative assets are often valued infrequently and reported with a significant time lag. Investors often receive updates quarterly or annually, and valuations can be difficult to verify. This lack of visibility reduces investor confidence and adds to the perception that alternatives are exclusive.
Research Study by JPM and Bain & Company
A joint study by Kinexys (JPMorgan) and Bain & Company in November 2022 surveyed 418 high-net-worth and ultra-high-net-worth individuals. The findings were clear:
- 53% of investors with $5 million or more in assets plan to increase their allocation to alternatives.
- Their main motivations were diversification (60%), pursuit of higher returns (25%), and advisor recommendations (15%).
Despite this growing demand, the study showed that alternatives still make up only about 5% of portfolios on average among even these wealthy investors. The barriers of cost, complexity, and limited access continue to keep allocations low.
This is where tokenization becomes a game-changer.
By automating ownership through blockchain, streamlining processes, and reducing costs, tokenization has the potential to expand access dramatically.
According to the same study, tokenization could unlock a $400 billion opportunity in distributing alternative investments to individuals.
How Tokenization Opens Access
Tokenization is the process of creating digital tokens on a blockchain that represent ownership or rights to a real-world asset (RWA). But the real innovation lies in the characteristics of blockchain technology itself.
A blockchain is transparent, secure and programmable. This means every transaction on the ledger is immutable—it cannot be altered or tampered with. All participants can verify and access transaction details in real-time, removing the need for paperwork and manual reconciliation. At the same time, smart contracts automatically enforce rules and agreements, eliminating costly intermediaries.
These features reduce costs, speed up processes, and remove many of the barriers that keep alternative investments exclusive today.
1. Automation via Smart Contracts
Traditionally, investment transactions involve lawyers, custodians, brokers, and settlement agents. Each step requires manual checks, paperwork, and delays. On a blockchain, smart contracts handle this automatically. They execute predefined rules for settlement, ownership transfer, and income distribution. This automation via smart contracts reduces operational costs, minimizes errors, and speeds up execution from days to minutes.
2. Liquidity Through Fractional Ownership
One of the biggest hurdles in alternatives is the high entry cost. Tokenization breaks large, illiquid assets into smaller, fractional units. Instead of needing $250,000 to enter a private equity fund, an investor might only need $500. These smaller tokens can then be listed and traded on secondary markets, creating liquidity where none existed before. This not only reduces barriers but also makes alternatives more appealing to a wider global audience.
3. Transparency and Security
With blockchain, every transfer of ownership is immutably recorded on-chain. This creates a tamper-proof, verifiable trail of activity visible to all participants in real-time. Security is also enhanced as investors interact with a shared ledger that is nearly impossible to alter. The result is greater trust, accountability, and investor confidence.
Real-World Example: Vehicle Tokenization
One of the real-world applications of tokenization is in the mobility sector, where vehicles are tangible assets that generate steady daily income.
Traditionally, investing in ride-hailing fleets has been complex. It requires navigating manual processes, multiple intermediaries, and a geographically limited pool of investors. These barriers make fleet ownership an alternative investment class that is costly and difficult to access.
Tokenization changes this model. By converting vehicles into digital tokens that represent ownership, fleets become open to a global investor base. Investors purchase tokens, cars go on the road, and income from leases flows back to token holders automatically through smart contracts.
This isn’t just theory. MVL, a blockchain mobility company, is already putting it into practice through its ecosystem players like ONiON Mobility and Musubi. Here, tokenized vehicles and investors are seamlessly connected onchain, creating a transparent and efficient cycle where value flows across all participants.
The result is a new type of investment. Investors earn returns from real-world activity while diversifying their portfolios with assets that don’t move in sync with traditional markets. Tokenized vehicles demonstrate how blockchain bridges the digital and physical economy, delivering real yield + real value.
Final Thoughts
The tokenization of alternative investments is not a passing trend. It is the start of a fundamental shift toward financial systems that are more open, efficient, and inclusive.
By reducing barriers, providing automation via smart contracts, and connecting capital to RWAs enabling real yields, tokenization is building the foundation for a mature, non-speculative crypto sector.
Institutions are not ignoring this shift. BlackRock, JPMorgan, Citi, and others are already launching tokenization pilots. Their involvement signals that this is not just hype but a structural transformation of how capital markets will function.
As Bain observed, this could unlock hundreds of billions of dollars in opportunities over the coming decade. And as the World Economic Forum has noted, the long-term potential stretches into the trillions.
The transformation has already begun. The only question left is: Are you ready to participate?
Over the past few years, tokenization has moved from niche blockchain jargon to a mainstream financial strategy.
Google Trends data shows that searches for “Tokenization” and “RWA” have recently reached all-time highs, reflecting the surge of global interest in this shift.
It’s not just retail curiosity driving this momentum. Today, major global institutions and Wall Street giants like BlackRock and JPM are betting on tokenization and racing to explore how real-world assets can be recorded, divided, and traded on blockchains.
๐กStablecoin Surge Signals What’s Next for RWAs
Currently, one of the fastest-growing segments in the RWA space is fiat-backed stablecoins. The stablecoin market cap nearly doubled between 2024 and 2025—from about $131 billion to over $271 billion. Momentum continues to build, with Japan even announcing plans to launch a yen-backed stablecoin later this year.
This stablecoin surge signals a major flow of capital from traditional finance into blockchain-powered decentralized finance, fueling deeper onchain liquidity. This means more and more users are onboarding into DeFi, and stablecoins are providing the necessary liquidity for broader adoption of RWAs.
The next step is expanding beyond currency into previously illiquid alternative assets such as real estate, private equity, and vehicles.
Tokenization rewrites the old playbook of alternative investments. By digitizing ownership and enabling fractional participation, it transforms illiquid, high-cost assets into accessible investment opportunities that can be traded and tracked globally with far less friction.
This is why many describe RWA tokenization as the next trillion-dollar wave in finance.
Don’t sleep on this new era of tokenization. Read on to see why it matters.
Global Financial System: TradFi & DeFi
To understand the importance of tokenization, it helps to look at the bigger picture of global finance.
Broadly, the financial system can be divided into two worlds: Traditional Finance (TradFi) and Decentralized Finance (DeFi).
It includes:
TradFi relies on central authorities such as banks, brokers, custodians, and regulators, to validate and process every transaction. These intermediaries provide oversight and legal protection but also make the system slow and costly. Settlement can take days, and participation often comes with considerable barriers.
DeFi mirrors many categories of TradFi, such as:
In the DeFi ecosystem, users can seamlessly buy and sell RWA tokens without relying on middlemen, cutting both transaction time and fees. This efficiency makes RWAs far more attractive compared to alternative investments in TradFi.
In this blog, we’ll explore how tokenization is transforming alternative investments from TradFi into DeFi, lowering barriers, improving liquidity, and opening access to a global pool of investors.
What Are Alternative Investments?
Alternative investments are assets outside the usual categories of stocks, bonds, or cash. They cover a wide range:
In TradFi, these opportunities were limited and concentrated to large institutions and seasoned investors due to high entry costs and complex processes. Also, they require expertise and careful due diligence, as each asset class carries its own risks and unique characteristics.
Yet despite these barriers, alternative investments remain attractive. They can improve a portfolio’s risk-adjusted returns by adding diversification, delivering capital growth or income streams that don’t always move in sync with the stock market.
Why Consider Alternative Investments?
Securities, such as bond and stocks, are relatively accessible, highly liquid, and easy to trade through regulated traditional exchanges.
A person with a brokerage account can buy or sell shares in seconds during the working hours. Their performance is usually tied to market cycles, interest rates, and broad economic indicators.
Alternative investments, by contrast, are less liquid and harder to access.
Buying a piece of real estate or participating in a private equity fund requires much larger commitments and longer holding periods. Their value depends on the performance of the underlying asset: rent from a property, the growth of a startup, or revenue from operation.
Because they are less connected to public markets, alternatives are attractive for diversification. They move differently than stocks and bonds and can act as a buffer in volatile times.
Barriers to Alternative Investments
Despite their potential, alternative investments remain difficult for most individuals to access. Three barriers stand out: complexity, liquidity, and transparency.
1. Complex process
One major challenge lies in the way alternative investments are structured and managed. Setting up a private equity fund, real estate, or infrastructure deal typically requires a chain of intermediaries: fund managers, custodians, brokers, legal advisors, auditors, and settlement agents.
Each plays a role in sourcing, structuring, and maintaining the deal, but together they add layers of cost, complexity, and delay. The process is still heavily manual, relying on paperwork, complex contracts, and lengthy settlement cycles. Compared to simply buying or selling a stock on an exchange, alternatives are slow and expensive to execute.
2. Liquidity
Capital invested in private equity, infrastructure, or venture funds can be locked away for five to ten years. Exiting early, if possible, usually comes at a discount. High minimum investment thresholds, often in the hundreds of thousands, also shrink the pool of buyers and sellers.
3. Transparency
Unlike public markets where prices are updated by the second, alternative assets are often valued infrequently and reported with a significant time lag. Investors often receive updates quarterly or annually, and valuations can be difficult to verify. This lack of visibility reduces investor confidence and adds to the perception that alternatives are exclusive.
Research Study by JPM and Bain & Company
A joint study by Kinexys (JPMorgan) and Bain & Company in November 2022 surveyed 418 high-net-worth and ultra-high-net-worth individuals. The findings were clear:
Despite this growing demand, the study showed that alternatives still make up only about 5% of portfolios on average among even these wealthy investors. The barriers of cost, complexity, and limited access continue to keep allocations low.
This is where tokenization becomes a game-changer.
By automating ownership through blockchain, streamlining processes, and reducing costs, tokenization has the potential to expand access dramatically.
According to the same study, tokenization could unlock a $400 billion opportunity in distributing alternative investments to individuals.
How Tokenization Opens Access
Tokenization is the process of creating digital tokens on a blockchain that represent ownership or rights to a real-world asset (RWA). But the real innovation lies in the characteristics of blockchain technology itself.
A blockchain is transparent, secure and programmable. This means every transaction on the ledger is immutable—it cannot be altered or tampered with. All participants can verify and access transaction details in real-time, removing the need for paperwork and manual reconciliation. At the same time, smart contracts automatically enforce rules and agreements, eliminating costly intermediaries.
These features reduce costs, speed up processes, and remove many of the barriers that keep alternative investments exclusive today.
1. Automation via Smart Contracts
Traditionally, investment transactions involve lawyers, custodians, brokers, and settlement agents. Each step requires manual checks, paperwork, and delays. On a blockchain, smart contracts handle this automatically. They execute predefined rules for settlement, ownership transfer, and income distribution. This automation via smart contracts reduces operational costs, minimizes errors, and speeds up execution from days to minutes.
2. Liquidity Through Fractional Ownership
One of the biggest hurdles in alternatives is the high entry cost. Tokenization breaks large, illiquid assets into smaller, fractional units. Instead of needing $250,000 to enter a private equity fund, an investor might only need $500. These smaller tokens can then be listed and traded on secondary markets, creating liquidity where none existed before. This not only reduces barriers but also makes alternatives more appealing to a wider global audience.
3. Transparency and Security
With blockchain, every transfer of ownership is immutably recorded on-chain. This creates a tamper-proof, verifiable trail of activity visible to all participants in real-time. Security is also enhanced as investors interact with a shared ledger that is nearly impossible to alter. The result is greater trust, accountability, and investor confidence.
Real-World Example: Vehicle Tokenization
One of the real-world applications of tokenization is in the mobility sector, where vehicles are tangible assets that generate steady daily income.
Traditionally, investing in ride-hailing fleets has been complex. It requires navigating manual processes, multiple intermediaries, and a geographically limited pool of investors. These barriers make fleet ownership an alternative investment class that is costly and difficult to access.
Tokenization changes this model. By converting vehicles into digital tokens that represent ownership, fleets become open to a global investor base. Investors purchase tokens, cars go on the road, and income from leases flows back to token holders automatically through smart contracts.
This isn’t just theory. MVL, a blockchain mobility company, is already putting it into practice through its ecosystem players like ONiON Mobility and Musubi. Here, tokenized vehicles and investors are seamlessly connected onchain, creating a transparent and efficient cycle where value flows across all participants.
The result is a new type of investment. Investors earn returns from real-world activity while diversifying their portfolios with assets that don’t move in sync with traditional markets. Tokenized vehicles demonstrate how blockchain bridges the digital and physical economy, delivering real yield + real value.
Final Thoughts
The tokenization of alternative investments is not a passing trend. It is the start of a fundamental shift toward financial systems that are more open, efficient, and inclusive.
By reducing barriers, providing automation via smart contracts, and connecting capital to RWAs enabling real yields, tokenization is building the foundation for a mature, non-speculative crypto sector.
Institutions are not ignoring this shift. BlackRock, JPMorgan, Citi, and others are already launching tokenization pilots. Their involvement signals that this is not just hype but a structural transformation of how capital markets will function.
As Bain observed, this could unlock hundreds of billions of dollars in opportunities over the coming decade. And as the World Economic Forum has noted, the long-term potential stretches into the trillions.
The transformation has already begun. The only question left is: Are you ready to participate?