In this edition, Marcin Kazmierczak from Redstone explores the evolution of tokenization, from concept to allocation. Then, in 'Ask an Expert,' Kieran Mitha addresses investor questions about tokenized investments. The rise of tokenized assets is no longer just a concept, but a reality, with companies like BlackRock, Franklin Templeton, and Fidelity Investments launching products on the blockchain. The challenge now lies in navigating compliance, identity, transfer rules, sanctions, and lifecycle management.
The compliance question is essentially an architecture question, with issuers needing to decide where to place compliance rules. For advisors, this decision directly affects how an asset behaves and its ability to move across chains, integrate with DeFi protocols, and serve as collateral in lending strategies. Institutional capital is moving on-chain, with deposits of tokenized real-world assets in DeFi lending protocols surpassing $840 million. As these assets move into lending and structured strategies, credit risk is evolving, with emerging DeFi risk ratings frameworks introducing continuous, on-chain risk assessment.
For advisors, this shifts the focus from what the asset represents to how it behaves under stress and what risks it entails. Despite the progress, some structural gaps remain, with corporate actions still relying heavily on off-chain processes, and illiquid assets not yet fully compatible with DeFi standards.