Industry Leaders Push Back Myth of Instant Liquidity

Industry leaders push back myth of instant liquidity for tokenized assets, stating it improves issuance and access but doesn't create liquidity. Tokenization has grown, with the tokenized RWA market expanding from $8.8 billion to $29.9 billion in one year.

Tokenization and Liquidity

Tokenization can widen access and modernize infrastructure, but it does not magically create buyers or functioning secondary markets. Assets like real estate and private credit were never especially liquid, so placing them on-chain shouldn't be expected to erase structural limits.

Real-World Asset Liquidity

Executives argued that illiquid assets do not become liquid merely because they are digitized. Tokenization may change packaging and access without transforming the underlying trading reality.

Market Growth and Liquidity

The tokenized RWA market has grown sharply, with the strongest gains in instruments that were already easier to standardize and trade. $8.8 billion to $29.9 billion in one year, led by Treasurys and commodities.

• Tokenized real estate rose from $35 million to $296 million
• Private equity increased from $60 million to $223 million

Key Takeaways

• Tokenization improves issuance and access but doesn't create liquidity
• Illiquid assets remain illiquid even when digitized
• Market growth doesn't prove meaningful secondary trading
• Tokenization may change packaging without transforming trading reality

Frequently Asked Questions

What is tokenization?

Tokenization is the process of converting assets into digital tokens on a blockchain.

Does tokenization create liquidity?

No, tokenization does not magically create buyers or functioning secondary markets, especially for inherently illiquid assets.