Asset tokenization is the process of issuing a blockchain token that represents ownership of a specific real-world asset: a U.S. Treasury bill, a share of common stock, a slice of a commercial property, or a tranche of private credit. The token sits onchain. The asset sits with a regulated custodian. A legal wrapper, usually a special-purpose vehicle (SPV) or registered fund, links the two. As of May 2026, RWA.xyz tracks roughly $32 billion in tokenized real-world assets onchain, excluding stablecoins, with tokenized U.S. Treasuries above $15 billion and tokenized private credit in the mid-teens of billions.
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This article covers how a real-world asset gets onto a blockchain, what each asset class unlocks, and what tokenization does not fix. For the broader concept, see what is tokenization. For regulatory framing of tokenized securities, see what is a security token.
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Asset tokenization is the issuance of a blockchain token that represents a claim on a specific off-chain asset. The token is the digital record of ownership. The underlying asset stays with a qualified custodian, broker-dealer, or fund administrator. A legal wrapper, typically an SPV, a Reg D fund, or a 1940 Act fund, makes the token redeemable for the underlying value.
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The distinction matters. A stablecoin tokenizes a dollar deposit. A wrapped token tokenizes another chain's asset. Asset tokenization, as tracked by RWA.xyz, refers to onchain representations of off-chain financial assets: Treasuries, equities, credit, real estate, commodities. Mechanics are similar across asset classes; the legal wrapper and custodian change.
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Tokenization runs through four stages: custody, legal wrapper, issuance, and onchain mint. The token itself is the cheap part. Custody, audit, transfer-agent, and broker-dealer relationships are expensive, and they determine which asset classes can be tokenized at all.
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First, the issuer identifies the asset and selects a custodian. For a Treasury bill that custodian is a regulated bank or prime broker. For tokenized equities it is a U.S. broker-dealer holding the share certificate at DTCC. For real estate it is the SPV itself, holding title through a deed. Second, the legal wrapper is created: tokenized Treasuries typically use a Reg D fund or a 1940 Act fund; BlackRock's BUIDL uses a Reg D feeder administered by Securitize; Ondo USDY uses an SPV called Ondo USDY LLC that issues notes onchain.
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Third, a transfer agent is appointed to maintain the official register, reconcile onchain balances against the off-chain ledger, and process subscriptions and redemptions. Securitize and Dinari are both SEC-registered transfer agents. Without one, the token has no legal pathway to the asset. Fourth, the token is minted: subscriptions arrive as a USD wire or stablecoin, the transfer agent updates its register, and the contract mints to the investor's whitelisted wallet. Most tokenized assets enforce a KYC allowlist at the contract level, which is why a BUIDL token cannot be sent to a random wallet the way USDC can. Redemption runs in reverse, with Circle's same-day USDC rail for BUIDL the most operational example of stablecoin-funded exit.
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Five asset classes account for nearly all onchain RWA value: U.S. Treasuries, private credit, equities, real estate, and commodities. Treasuries and private credit dominate by dollar value; equities, real estate, and commodities are smaller but growing faster by issuer count. What changes across them is the custodian, the wrapper, and the redemption window.
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Figures pulled from RWA.xyz and DeFiLlama dashboards. RWA AUM rotates daily, so treat the numbers as point-in-time markers.
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Tokenized Treasuries are the largest single-asset RWA category onchain. They package short-duration U.S. government debt inside a fund wrapper, then issue a token that accrues the underlying yield. The four largest issues are BlackRock's BUIDL, Ondo's OUSG and USDY, and Franklin Templeton's BENJI, each using a different combination of fund structure, custodian, and access rule.
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BUIDL, the BlackRock USD Institutional Digital Liquidity Fund, is a Reg D feeder fund administered by Securitize. As of mid-May 2026 it held roughly $2.5 billion in AUM across Ethereum, Arbitrum, Avalanche, Optimism, and Polygon. It is restricted to U.S. accredited investors at issuance, pays yield via daily rebase, and offers same-day USDC redemption through Circle.
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Ondo OUSG is a feeder into BUIDL itself, lowering operational friction for crypto-native treasuries that want BUIDL exposure without onboarding to Securitize directly. OUSG held roughly $500 million as of Q2 2026 per RWA.xyz. Ondo USDY is a different product: a tokenized note backed by short-duration Treasuries and bank deposits, available to non-US retail. As of April 2026 it paid roughly 4.65% APY on around $740 million in supply across Ethereum, Solana, Mantle, Sui, and Aptos.
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Franklin Templeton BENJI represents shares in FOBXX, the Franklin OnChain U.S. Government Money Fund, the first U.S.-registered mutual fund to use a public blockchain as its system of record. The BENJI suite was around $1.98 billion in AUM per Franklin Templeton's April 2026 press release, deployed across Stellar, Avalanche, Aptos, Polygon, Base, and Solana.
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Tokenized equities represent shares of public companies held by a broker-dealer or trustee, with the token as a claim on the underlying. Mechanics resemble tokenized Treasuries; broker-dealer custody and transfer-agent registration are the harder parts. The largest 2026 issuers are Backed Finance (xStocks), Dinari (dShares), and Robinhood's EU tokenized-stock product.
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Backed's xStocks line uses a Swiss-law tracker certificate that holds the underlying share at a regulated custodian, with the token issued on Solana, Ethereum, and other chains. xStocks trades on Kraken and Bybit, with the catalog passing 100 tokenized US stocks and ETFs by May 2026 and roadmap targets to expand further through the year, and cumulative transaction volume above $25 billion since launch per Kraken. Dinari issues dShares through Dinari Inc., which holds the underlying U.S. equity through a broker-dealer relationship and is SEC-registered as a transfer agent. Dinari's Q1 2026 partnership with Flow Traders set up 24/7 market-making across roughly 300 U.S. equity SKUs. Robinhood's EU offering tokenizes U.S. equities for EU retail under a MiCA-compliant wrapper, launched in mid-2025 on Arbitrum. See the Backed Finance explainer for the issuance mechanism.
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The common thread: U.S. investors generally cannot hold these tokens directly because broker-dealer rules do not yet recognize a tokenized share as equivalent to a DTCC-held share. Dinari's SEC transfer-agent license is the most visible path toward U.S. retail access.
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Real estate, private credit, and commodities use the same custody-then-mint pipeline at very different scales. Real estate is fragmented, private credit is the largest by dollar value, and tokenized gold has the longest operating history.
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Real-estate tokens almost always wrap one property per SPV. RealT files a U.S. LLC for each property, conveys the deed into the LLC, and issues an ERC-20 representing a fractional LLC interest. Rental income pays daily in USDC. RealT had tokenized roughly 600-plus U.S. multifamily properties across seven states by early 2026, with annual rental yields commonly quoted in the high-single to low-double-digits. Propy operates a different model focused on closing infrastructure.
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Private credit is one of the largest dollar-volume categories onchain in Q2 2026, with active loans tracked at the mid-teens of billions across the major platforms. Centrifuge tokenizes pools of invoices, freight receivables, and Treasury bills into ERC-4626 vaults; Maple Finance runs institutional credit pools with KYC'd lenders; Figure tokenizes home-equity lines on its Provenance chain. Each token is a claim on a tranche of a pool, not an individual loan.
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Tokenized commodities are mostly gold. Paxos Gold (PAXG) and Tether Gold (XAUT) each represent one troy ounce of LBMA-grade gold in a vault, with combined supply near $1.5 billion. The custody model resembles a traditional ETF: a vault holds the bar, an attestation names it by serial number, and the token transfers freely.
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Tokenization unlocks three concrete properties off-chain settlement does not provide: continuous settlement, fractional access, and programmability. It does not eliminate KYC, jurisdictional access rules, or off-chain enforcement. Treating a tokenized asset as if it were a permissionless ERC-20 is the most common builder mistake.
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Continuous settlement removes the T+1 lag: a BUIDL holder can redeem to USDC and have stablecoin liquidity in minutes rather than waiting for the next bank-business-day cycle. Fractional access lowers the unit size: RealT sells $50 stakes in a Detroit duplex; xStocks lets a non-US holder buy 0.0001 shares of Tesla. Programmability has no off-chain analogue: a tokenized Treasury can be posted as DeFi collateral, a tokenized property can split rent across hundreds of wallets atomically, and a tokenized credit tranche can be sliced into yield and principal strips inside an onchain vault.
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What tokenization does not fix is structural. KYC and accreditation gates remain in force at the contract level. BUIDL enforces a whitelisted-wallet allowlist; USDY blocks U.S. retail at issuance; xStocks generally cannot be sold to U.S. residents. Jurisdictional access is set by the wrapper, not the chain. Off-chain enforcement is the deepest constraint: a tokenized real-estate position is a claim on an LLC that holds a deed, and if the LLC is sued or the property is condemned, the onchain token has no special status against a court order. The relevant comparison is to an ETF or a CSD-held security, not a self-custodied crypto asset.
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Eco's stablecoin stack sits upstream of the tokenization layer. When a holder subscribes to BUIDL or redeems out of USDY, the dollar leg usually moves as USDC, USDT, or PYUSD. Eco Routes lets that stablecoin leg settle across the 15+ chains where tokenized funds live without the holder bridging first. The redemption-day liquidity Circle built for BUIDL is the same problem at smaller scale across every RWA issuer: a stablecoin needs to land on the right chain at the right time. Eco's intent-based router handles the cash leg; tokenization issuers handle the asset leg.
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Sources and methodology. RWA AUM figures pulled from RWA.xyz and DeFiLlama in May 2026. Issuer figures (BUIDL ~$2.5B, USDY ~$740M, OUSG ~$500M, BENJI ~$1.98B) cross-checked against Securitize, Ondo, and Franklin Templeton. Figures rotate daily; treat as point-in-time markers.
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