Tokenization Alone Won’t Enhance Liquidity for Assets
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James Mitchell combines investment banking with cryptocurrency journalism to analyze the institutional adoption of digital assets. Specializing in ETFs and regulation, he translates complex developments…
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During the recent Paris Blockchain Week, industry leaders emphasized that tokenization, while promising, does not inherently resolve the liquidity issues surrounding hard-to-trade assets. The panel discussions highlighted the challenges faced by various asset classes such as private credit and real estate when transitioning onto blockchain platforms.
Oya Celiktemur, Ondo Finance’s sales director for the EMEA region, pointed out the persistent misunderstanding that tokenizing illiquid assets would lead to their quick transformation into liquid ones. She clarified that traditional assets such as real estate were never designed for high liquidity in the first place.
Echoing this sentiment, Francesco Ranieri Fabracci, who leads tokenization expansion at Tether, remarked that simply moving an asset onto a blockchain does not guarantee its liquidity. He insisted that only certain financial instruments—like bonds and stablecoins—are likely to see consistent trading activity in tokenized formats.
This conversation comes at a time when the market for tokenized real-world assets (RWAs) is reportedly growing. However, industry experts are shifting their focus from mere asset issuance to questioning whether these tokenized products can sustain active markets beyond initial distribution.
Recent figures from RWA analytics platform RWA.xyz indicate a substantial growth trajectory for the tokenized RWA market, expanding from $8.8 billion in April 2025 to approximately $29.9 billion a year later. This growth has been primarily driven by standardized assets like tokenized US Treasury Debt and commodities.
While certain sectors have witnessed impressive percentage gains—tokenized real estate surged from $35 million to $296 million, and private equity increased from nearly $60 million to $223 million—these figures alone do not guarantee liquidity. Analysts warn that even with rising valuations, actual trading activity may remain limited.
In summary, as the tokenization of assets continues to gain traction, understanding the nuances of liquidity in these markets remains crucial. Industry leaders stress that while tokenization can improve access and issuance, it cannot single-handedly create vibrant secondary markets for traditionally illiquid assets.
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