What are Real World Assets (RWA)

RWA TreeD Investment Fund

Surely many have heard BlackRock CEO Larry Fink's repeated statements that the next big wave in crypto will be the tokenisation of real assets - a narrative that has been echoed by other major firms and analyst services.

Let's be honest, the way we invest is changing really quickly. Those days when only the elite had access to valuable assets like property, gold, or private equity are over. Thanks to RWA tokenisation, everyday investors can now own fractions of these assets and trade them.

The capitalisation of the RWA sector today stands at $36.9 billion and analysts are predicting that the sector will grow to trillions of dollars in the next few years.

RWA (Real World Assets) are assets from the "Real" (off-chain) world that are tokenized for further use in the DeFi ecosystem.

Tokenised real-world assets (RWAs) are blockchain-based digital tokens that represent physical and traditional financial assets such as cash, commodities, stocks, bonds, loans, art and intellectual property.

In simple terms, tokenisation can turn any asset into a digital asset, making it transferable, highly liquid, fractional and easy to store - all without intermediaries.

RWA-backed tokens can also bring those who don't understand the DeFi ecosystem into the hands of those who do. Real-world assets fall under the category of traditional finance (TradFi), an area that is full of regulations, intermediaries and more. Tokenisation aims to bring these assets into the decentralised world, making them part of an ever-growing industry.

More than 50 major banks and over 300 investment funds have invested in RWA and blockchain technology. The market capitalisation of the sector is expected to grow to $16 trillion by 2030.

Which Banks and Investment Funds Have Invested in RWA?


Notable investors in RWA include:

Goldman Sachs has shown a keen interest in the tokenization of real estate and other physical assets. The firm has been involved in several initiatives aimed at leveraging blockchain technology to enhance the liquidity and accessibility of RWAs.

JPMorgan has been at the forefront of integrating blockchain technology with traditional banking. The bank has explored the tokenization of various real-world assets and is actively involved in developing blockchain-based platforms for trading and managing these assets.

Fidelity Investments has launched a digital asset arm that focuses on the tokenization and management of real-world assets. The firm is particularly interested in how blockchain can provide new investment opportunities and enhance the trading of physical assets.

BlackRock: As one of the world's largest asset managers, BlackRock has been exploring the integration of RWAs into its investment portfolios. The firm is interested in how tokenization can provide greater liquidity and diversification for its clients.

Citibank has invested in technologies that enable the tokenization and trading of real-world assets. The bank's innovation lab has been exploring various applications of blockchain to improve the efficiency and transparency of asset management.

These institutions recognize the potential for enhanced liquidity, transparency, and efficiency in asset management through RWA NFTs.

But not only large funds and banks can own real-world assets (RWA); individuals of all income levels can invest in tangible assets like real estate and art through fractional ownership. This democratization of asset ownership provides broader access to investments traditionally reserved for large institutions, promoting financial inclusion.