Real-World Asset Tokenization: Building Trust for Institutional Investors
Real-world asset (RWA) tokenization has reached $27 billion, growing 118% year-over-year. This surge is led by BlackRock’s $1.7 billion BUIDL fund. Though, most platforms still lack teh infrastructure to attract major institutional capital.
Institutions like Franklin Templeton and KKR are exploring tokenization. Yet, many remain cautious due to gaps in asset segregation, auditability, and regulated custody. These issues can turn technical breaches into legal nightmares.
For RWA tokenization to succeed, platforms must prioritize compliance, real-time audits, and secure custody. Without these, institutional investors will stay away.Only 76% of customary hedge fund managers are hesitant to invest in crypto due to auditability and reporting concerns.
Regulated custody and insurance are crucial.Pension funds won’t trust browser extension wallets. They need SOC2 or ISO certified custodians with robust insurance.
Compliance is also key. Permissionless access,onc a DeFi selling point,now raises red flags. Without built-in KYC, AML controls, and whitelisted investor pools, institutional allocators cannot participate.
While some platforms meet these standards, most face regulatory scrutiny. The SEC demands deeper disclosures and stronger investor protections. The real test is just beginning. Platforms that embed compliance, auditability, and custodial safeguards from the start will led the way.
As institutional capital becomes more selective, only trusted platforms will succeed. The future of RWA tokenization depends on building robust, institution-ready infrastructure.
