Avoiding NFT déjà vu: letting tokenisation scale without barriers

If you’ve attended any finance panels recently or glanced at the latest fund launches, you’ve probably heard about tokenisation, as it’s everywhere these days. And with good reason: more than $34 billion in real-world assets have already moved on-chain, from tokenised US Treasuries to “digital gold” and even real estate. All of which makes it easy to believe that finance has finally reached its programmable, borderless future.

But look closer, and the reality proves more intricate. According to recent research, most tokenised assets barely trade — BUIDL, the largest RWA token by market capitalisation, has only 85 holders, 30 active wallets, and 104 monthly transfers. Liquidity is thin, market-makers remain on the sidelines, and the legal part, from wrappers to cross-border settlement, is still incomplete.

So why aren’t RWAs working yet? Let's try to figure it out.

Three gaps stalling tokenised assets

For all its excitement, the RWA market remains trapped between promise and proof. And if I had to name the first thing that comes to mind when asked what’s holding tokenisation back, it'd be liquidity.

Most tokenised assets, whether Treasuries, funds, or private credit, hardly trade once issued, a reality confirmed by research revealing that “RWA tokens exhibit low trading volumes, long holding periods, and limited investor participation.” That meagre activity widens spreads, clouds valuations, and discourages market-makers who lack the depth to commit capital. The result is a market that looks liquid on paper but behaves like a closed loop — attractive to issue, difficult to exit.

Even if liquidity forms, regulation is the next bottleneck. When rules are consistent, markets follow; when they aren’t, progress stalls, and, so far, tokenisation falls into the latter. Every jurisdiction defines digital securities differently: MiCA in Europe, the DSS in the UK, Project Guardian in Singapore, and case law in the US. That means each project demands bespoke legal work and compliance mapping — a reminder that geography still decides what tokenisation can and cannot be.

The infrastructure needs to be ready, too. Yet custody, settlement, and valuation systems remain fragmented, with most pilots still running outside core banking rails. As a recent market report observed, without trusted oracles and interoperable standards, tokenisation cannot yet deliver its full promise of instant settlement and collateral efficiency. This keeps institutions from treating tokens as balance-sheet assets or eligible collateral, preventing the market from scaling in any meaningful way.

Story Continues

So, each of these gaps shows that tokenisation may not be short on ambition, but it’s certainly short on foundations. The real question now is how to lay them quickly enough for the market to stand on its own.

Are tokenised markets ready for true scale?

If tokenisation is to move from promise to practice, it needs firmer ground beneath, and in practice, that ground is credible, functioning secondary markets.

Such dedicated secondary venues as MAS’s Project Guardian liquidity pools or the UK’s Digital Securities Sandbox clearly prove that when issuers, custodians, and market-makers operate on shared standards, depth follows. Liquidity incentives, transparent pricing feeds, and interoperable disclosure rules could replicate that at scale, which could finally make on-chain assets investable, not just issuable.

Just as quickly, legal certainty must evolve, because a token that cannot prove title or settle under recognised custody rules will always sit at the periphery of finance. I think the solution to the current patchwork lies in standardised wrappers and mutual recognition across jurisdictions. That would finally let institutions treat tokenised assets as balance-sheet eligible, paving the way for global issuance and usability.

Eventually, unified-ledger prototypes, tokenised collateral networks introduced by leading global banks, and other market-grade experiments point to a future where custody, pricing, and settlement move on the same rails. So, interoperability is no longer a nice-to-have — it’s a prerequisite. Once those rails are trusted and connected, capital may circulate through tokenised markets as efficiently as code.

If layers converge, tokenisation would go beyond the experiment and become the backbone of modern market architecture. But if they don’t, it risks ending where NFTs did: with innovation outpacing adoption and a cycle of hype that never quite turns into habit. The industry still has time to decide which story it wants to write — but not much.

By Arthur Azizov, founder and investor at B2 Ventures

"Avoiding NFT déjà vu: letting tokenisation scale without barriers" was originally created and published by Private Banker International, a GlobalData owned brand.

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