By
Andrea Candela and Marin Konjari
April 7, 2025
4 minutes
Tokenization is no longer just an intriguing concept—it’s a revolutionary approach reshaping the world of finance, commerce, and ownership. Defined as the process of converting real-world or intangible assets into digital tokens on a blockchain, tokenization is a core component of Web3’s promise to create a decentralized, efficient, and accessible digital economy. According to McKinsey, tokenized market capitalization could reach $2 trillion by 2030, excluding cryptocurrencies, showcasing its immense potential.
For financial institutions, investors, and blockchain innovators seeking to build, explore, and expand in this arena, tokenization offers not just enhanced efficiency and transparency, but also opportunities to redefine industries altogether.
In Part 1 of this two-part series, we’re breaking down tokenization in a way that’s easy to understand. We’ll cover what it is, how it works, and where it’s being used in the real world. You’ll learn the basics, see how it adds value and sparks innovation, get a glimpse of the current tokenized asset market, and explore the trends shaping its future. Let’s dive in!
Tokenization is the process of converting rights or ownership of an asset—whether physical real-world (RWA), digital, or intangible—into a digital token on a blockchain. These tokens can represent anything, from real estate shares to intangible assets like intellectual property.
This process allows assets to be securely traded, automated, and digitized in ways traditional systems struggle to achieve.
To grasp why tokenization is a game-changer, consider its unique benefits.
In the paper The Tokenization of Everything: Towards a Framework for Understanding the Potentials of Tokenized Assets, (July 2021) authors, Roger Heines, Christian Dick, Christian Pohle, and Reinhard Jung, suggest that almost anything with value or contractual rights could be tokenized. This is increasingly becoming the predominant sentiment.
A wide range of assets can now be tokenized, from financial assets like stocks, bonds, and derivatives to physical ones like real estate, gold, art, and collectibles, represented as digital twins. Even intangible assets such as intellectual property, licenses, and access rights can be turned into tokens.
Here are some emerging use cases gaining momentum:
Stablecoins like USDT or USDC bring the stability of fiat currencies to blockchain transactions by tokenizing a “vault” or “pool” of locked fiat assets that represent their value. They’re programmable, globally transferable, and widely used in DeFi platforms.
Tokenization provides fractional ownership opportunities for high-value properties, democratizing access to real estate investments while increasing liquidity.
Tokenization of IP enables creators to share ownership and revenue streams with investors, providing a more direct relationship with their audience. Platforms like Story exemplify this by allowing creators to tokenize their intellectual property, fostering collaboration and new opportunities.
Digital art has democratized creativity through NFTs. Beyond art, these tokens also guarantee royalties for creators, disrupting traditional business models in intellectual property.
Tokenizing bonds, mutual funds, or equities has the potential to transform global finance, providing faster settlements and boosting market efficiency.
Tokenization is reshaping how we view ownership. From tangible assets to intangible ones—even personal potential—everything can be digitized and traded as fractional ownership. Unlike traditional financing, blockchain and decentralized technologies are paving the way for a future that could disrupt established hierarchies within the next two decades.
The tokenization frontier is filled with opportunity. Here’s what the future holds.
As Robert Leshner, creator of Compound and Superstate, and a pioneer of DeFi, shared during his podcast for Bankless:
Improved infrastructure and the increase in brain power, people, talent, and energy that can create a breakthrough is a significant sign of traction.
This momentum showcases the exciting potential of tokenization.
We hope this article gave you a clear, no-nonsense look at what tokenization could mean for you and your business. If it clicked with you, stick around for Part 2 of our series, where we move beyond the vision and dive into actionable insights.
In the next instalment, we’ll outline the 6 key steps to building your tokenization project — from early-stage development to strategic growth. Whether you’re a tech entrepreneur, blockchain enthusiast, or project leader, this guide will highlight the critical focus areas for achieving scalability, long-term resilience, and real-world impact.
Exciting things ahead—don’t miss it!
Tokenisation is the process of converting the rights or ownership of an asset – be it a physical real-world asset (RWA), a digital asset, or an intangible asset – into a digital token that exists on a blockchain. Essentially, it digitally represents ownership or rights to something of value. This process involves creating a digital representation of the asset on a distributed ledger, allowing it to be securely traded, managed, and often divided into smaller, more accessible units.
Tokenisation offers several key benefits, including enhanced transparency and security due to the immutable and traceable nature of blockchain technology. It also brings efficiency and programmability through smart contracts, enabling automated actions such as dividend distribution or the enforcement of agreements. Furthermore, it facilitates fractional ownership, allowing a broader range of investors to access high-value assets, and significantly increases liquidity for previously illiquid assets by making them tradable on digital marketplaces.
The range of assets suitable for tokenisation is broad and expanding. It includes traditional financial assets like stocks, bonds, and derivatives, as well as physical assets such as real estate, gold, art, and collectibles (often represented as digital twins). Importantly, intangible assets like intellectual property, licenses, and access rights can also be tokenised, demonstrating the versatility of this approach across various sectors.
Several use cases are gaining traction. Stablecoins, like USDT and USDC, tokenise fiat currencies for use in blockchain transactions. Real estate is being tokenised to offer fractional ownership and increase market accessibility. Intellectual property is being tokenised, allowing creators to share ownership and revenue. Artwork, particularly digital art through NFTs, demonstrates the potential for creator royalties. Finally, the tokenisation of securities like bonds and equities aims to improve settlement times and market efficiency.
Blockchain technology is fundamental to tokenisation as it provides the underlying infrastructure for creating, issuing, and managing digital tokens. Its inherent characteristics of immutability and traceability ensure that records of ownership and transactions are transparent and cannot be tampered with, building trust and reducing fraud. Smart contracts, also part of blockchain ecosystems, enable the automation of processes and the enforcement of pre-defined rules associated with the tokenised assets.
Several trends point towards a significant expansion and integration of tokenisation. Improved interoperability between different blockchains will facilitate seamless, borderless digital ownership. The integration of Artificial Intelligence (AI) and the Internet of Things (IoT) with blockchain could automate asset tracking and authentication. Capital democratisation, driven by lower transaction costs, will likely enable smaller investors to access a wider range of financial products. Additionally, storing data on-chain offers improved infrastructure resilience by reducing reliance on single points of failure.
Tokenisation has the potential to disrupt established hierarchies by democratising access to assets and financial products that were previously exclusive. Fractional ownership lowers barriers to entry, while increased liquidity can transform how illiquid assets are traded. The transparency and efficiency offered by blockchain and smart contracts can streamline processes and potentially reduce the role of traditional intermediaries in various industries.
For those looking to delve deeper into tokenisation, understanding the fundamentals is crucial, as this document has outlined. The subsequent steps, as hinted at, involve moving from vision to action, which includes outlining key stages for building a tokenisation project. This involves considering aspects like project development, strategic growth, scalability, long-term resilience, and achieving real-world impact. Part 2 of the series will provide more actionable insights in this regard.
