The State of Financial Tokenization in 2025

As 2025 wraps up, “real-world asset” (RWA) tokenization has stopped being a crypto buzzword and started looking like the next layer of financial plumbing.

In plain English: more and more serious money—U.S. Treasuries, money market funds, bonds, real estate, private credit—is now being represented as tokens on regulated, mostly permissioned blockchains.

What exactly do we mean by “financial tokenization”?

Financial tokenization is the process of representing traditional assets as digital tokens on a distributed ledger, while keeping the legal and regulatory treatment of the underlying asset intact.

Today, this spans:

• Tokenized Treasuries & money market funds
• Tokenized bank deposits (“tokenized liabilities” or “tokenized deposits”)
• Tokenized funds and structured products (ETFs, private funds, credit products)
• Tokenized bonds and green bonds
• Real estate and private credit deals
• Carbon credits and other ESG assets

The value isn’t in “crypto speculation” anymore; it’s in fractionalization, instant settlement, better collateral mobility, and 24/7 programmable rails. xbto.com+1

The numbers: from experiments to tens of billions

A few datapoints underline how far tokenization has come:

• Non-stablecoin RWA tokens have grown from roughly $5B in 2022 to about $24B by mid-2025—a ~380% jump in three years. Forbes+1
• Including newer categories and additional chains, the tokenized asset market is estimated around $33.8B as of late 2025, with total tokenized value (including stablecoins) north of $240B–$300B. 4ire+1
• Independent market research pegs the tokenized assets market at ~$24B in 2025 with a very high growth rate, and some projections see hundreds of billions to multiple trillions by 2030+. Market.us+1

So while we’re still early relative to global capital markets, tokenization is now measured in tens of billions, not proof-of-concept pocket change.

The United States: from legal question marks to structured frameworks

The US is still the most important jurisdiction for tokenized finance, and 2025 has been a transition year from “are we allowed to do this?” to “how do we do this compliantly?”

1. Congress: tokenization and stablecoins brought into the policy mainstream

Recent U.S. legislation and proposals directly reference tokenization:

• The Tokenization Report Act of 2024 requires the SEC to report to Congress on trends in tokenizing traditional assets using blockchain—essentially formalizing tokenization as a topic of U.S. financial policy. Congress.gov
• In 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act and the Digital Asset Market Clarity Act moved stablecoins and digital asset businesses toward a firmer, federal framework—critical plumbing for tokenized dollar products and collateral. American Bar Association

Even when the laws aren’t “tokenization-specific,” they create the regulatory bedrock that tokenized funds, bonds, and deposits sit on.

2. SEC: “tokenized securities are still securities”

The SEC’s message has become clearer: putting a stock or bond on a blockchain doesn’t magically change what it is.

• SEC roundtables and written input in 2025 reinforce that tokenized instruments must still meet existing disclosure, registration, and trading rules—a token that represents a security is legally still a security. Hunton Andrews Kurth+3SEC+3Free Writings+3

For issuers and platforms, the takeaway is simple: structure first, blockchain second. If it wouldn’t be legal in paper form, it won’t be legal in token form.

3. CFTC & bank regulators: tokenized collateral and market access

Two big U.S. shifts matter for tokenized finance:

• The CFTC issued guidance in December 2025 clarifying how tokenized Treasuries, corporate bonds, and money market funds can be used as collateral for futures and swaps within the existing regulatory framework. Davis Wright Tremaine
• The CFTC also approved trading of spot crypto products on CFTC-registered exchanges—a step that further legitimizes tokenized and digital assets within regulated U.S. markets. Reuters
• The OCC signaled that U.S. banks can act as intermediaries in crypto transactions under certain conditions, effectively opening the door for more banks to integrate tokenized assets and custodial services into their business. Reuters

Together, this is pushing tokenized assets out of “crypto native” venues and into regulated derivatives, collateral, and banking channels.

Institutional adoption in the US: Treasuries, funds, and bank rails

On the ground, tokenization is now an institutional story:

• Tokenized Treasuries & money market funds
  
  • BlackRock’s tokenized Treasury fund helped lead the way, and by mid-2025, about $6–7B of U.S. Treasuries and similar instruments had been tokenized across major institutional products. Investopedia+1
  • Goldman Sachs and BNY Mellon announced a collaboration to offer tokenized money market fund access through BNY’s LiquidityDirect and Goldman’s GS DAP private blockchain—bringing big-name asset managers into the tokenized fund game. Investopedia
• Institutional tokenization platforms & infrastructure
  
  • Networks like Canton have become important rails for privacy-preserving, interoperable, institutional-grade tokenized assets, processing trillions in monthly volume and hundreds of billions in tokenized U.S. Treasury repo activity on a network-of-networks architecture. canton.network+2canton.network+2

In short: U.S. tokenization is no longer just startups; it’s household names in asset management, banks, and market infrastructure quietly moving real assets onto controlled ledgers.

Europe and the UK: digital securities and tokenized bonds go mainstream

Europe and the UK have taken a slightly different path—leaning hard into regulated digital securities and bond markets.

Key threads:

• Digital bond markets & green bonds
  
  • The HK$10B tokenized green bond issued by the Hong Kong government in 2025 (with central bank money tokens in settlement) grabbed global attention, but Europe has been running parallel experiments. hkma.gov.hk+2chinadailyhk+2
  • In Europe, green and ESG-linked tokenized bonds reached roughly €483M in 2024, representing around 28% of tokenized fixed-income volume—a strong signal that sustainable finance and tokenization are converging. Blockinvest
  • International bodies like IOSCO and the BIS released detailed reports in 2025 on tokenization of financial assets and government bonds, highlighting early efficiency gains and risk considerations. IOSCO+1
• Infrastructure and platforms
  
  • Deutsche Börse’s partnership with Kraken aims to connect traditional exchanges and FX platforms to tokenized products and custody, while also integrating tokenized equities and ETFs through prior acquisitions. FN London
  • The EU has begun explicitly recognizing blockchain-based share and bond registers, enabling companies in certain jurisdictions to issue tokenized equity and fund participations under clear law. Legal Nodes
• Bank deposits & tokenized money
  
  • The European Banking Authority’s 2024–25 work on tokenized deposits gives banks a preliminary roadmap for representing deposits on DLT while staying within prudential rules. European Banking Authority
  • In the UK, Lloyds Banking Group has publicly outlined a vision for tokenized customer deposits integrated with AI to streamline processes like homebuying, signaling that tokenized bank money is heading for mainstream retail use cases. Financial Times

Europe’s story: tokenization is being folded into securities law, ESG policy, and bank regulation, not treated as a parallel shadow system.

Asia and the Middle East: sandbox today, infrastructure tomorrow

While the US and Europe focus heavily on regulatory integration, Asia and the Middle East are leaning into tokenization as strategic financial infrastructure.

Singapore – Project Guardian and tokenized funds

• Project Guardian, led by the Monetary Authority of Singapore (MAS), has grown into a flagship global initiative: dozens of institutions are experimenting with tokenized bonds, funds, FX, and tokenized bank liabilities. ISDA+3mas.gov.sg+3gftn.co+3
• Proof-of-concepts have demonstrated tokenized money market funds, embedded FX, and cross-bank settlement using tokenized deposits and regulated stablecoins. mas.gov.sg+1

Singapore is positioning itself as the reference model for large-scale, institutional, interoperable tokenized finance.

Hong Kong – digital green bonds and tokenized deposits

• Hong Kong has issued three waves of tokenized green bonds since 2023, including a HK$10B digital bond in 2025 with tokenized central bank money integrated into the settlement cycle. chinadailyhk+3hkma.gov.hk+3hkma.gov.hk+3
• The HKMA’s Project Ensemble and Project Evergreen explore tokenized deposits and broader digital bond markets, including subsidy programs to attract issuers to tokenize on Hong Kong infrastructure. hkma.gov.hk+2hkma.gov.hk+2

Middle East & UAE – tokenized real estate and funds

• In the Gulf, tokenization has become part of broader digital asset strategies:
  
  • Dubai’s DAMAC Group signed a $1B deal with MANTRA to tokenize real-world assets such as real estate and data centers in the region. Reuters
  • Regulators in Dubai, Abu Dhabi, and Bahrain are approving tokenized funds and courting tokenization platforms; Dubai’s DFSA recently approved the region’s first tokenized money market fund. investax.io+1

Asia and the Middle East are effectively saying: “We want to be the hub where tokenized capital flows.”

Where the value is actually showing up

Across regions, the clearest value cases so far are:

1. Collateral & liquidity
   
   • Tokenized Treasuries, MMFs, and high-grade bonds used as instant-settling collateral in derivatives, repo, and lending markets—often across previously siloed systems. canton.network+2Davis Wright Tremaine+2
2. Faster, cheaper bond issuance and settlement
   
   • Digital bonds settling in T+1 instead of T+5 and embedding documentation and ESG data directly into the token rails. hkma.gov.hk+1
3. Programmable funds and structured products
   
   • Tokenized funds that can enforce rules (eligibility, limits, fees) in code, while plugging into both traditional platforms and on-chain ecosystems. mas.gov.sg+1
4. Global investor access
   
   • Fractional ownership and 24/7 settlement make it easier for cross-border investors to access assets that were previously restricted or operationally cumbersome. World Economic Forum Reports+2xbto.com+2

What’s still hard

Despite the hype, tokenization is not a solved problem. The main frictions:

• Legal certainty across borders – Offering a tokenized fund from, say, the Cayman Islands to U.S. and EU investors still requires careful use of private offering exemptions and securities rules; the token wrapper doesn’t simplify that by itself. Buzko Legal+1
• Interoperability of ledgers – Many institutions use private or permissioned chains; linking these to each other and to public DeFi in a controlled way is still complex. 21shares+1
• KYC/KYB, custody, and identity – The onboarding stack (investor identity, sanctions screening, suitability, custodial arrangements) remains the slowest, most regulated part of the process.
• Market structure and liquidity – A tokenized bond with no market makers is still an illiquid bond; liquidity design, not just tokenization, determines whether secondary markets work. Bank for International Settlements+1

In other words, tokenization amplifies good market structure—it doesn’t magically create it.

Looking ahead: 2026 and beyond

Based on 2025’s trajectory, expect the next 1–3 years to look like this:

• More “boring” assets on-chain – Treasuries, MMFs, IG credit, deposits, and high-quality real estate will dominate volumes; speculative tokens will matter less. DB Research+2CoinDesk+2
• Regulated DeFi rails for institutions – Oracle providers and institutional blockchains are already integrating, letting RWAs be used safely as collateral and in DeFi-style structures. CoinDesk+1
• Convergence of AI and tokenization – From automated risk monitoring to AI-driven portfolio construction around RWAs, AI is increasingly layered on top of tokenized rails. The Economic Times+1
• Jurisdictional competition – Singapore, Hong Kong, the UAE, and select EU hubs will keep pushing hard to attract tokenization platforms and issuers, while the U.S. continues to refine its regulatory stack. American Bar Association+4investax.io+4hkma.gov.hk+4

For issuers, asset managers, and platforms, the message is clear: tokenization is no longer a side bet—it’s becoming table stakes for global capital markets.