The world of tokenization is rapidly evolving, with assets moving from concept to allocation. In this article, Marcin Kazmierczak from Redstone explores the evolution of tokenization, while Kieran Mitha answers investor questions about tokenized investments. Major companies like BlackRock, Franklin Templeton, and Fidelity Investments have launched real products on the blockchain, including Treasury funds and private credit strategies.
The technology to create tokens is no longer the main challenge; instead, decisions on compliance, identity, transfer rules, sanctions, and lifecycle management are becoming the key focus areas. The compliance question is an architecture question, with issuers needing to decide where to place compliance rules. For advisors, this choice directly affects how an asset behaves, determining its ability to move across chains, integrate with DeFi protocols, and serve as collateral in lending strategies.
Institutional capital is already moving on-chain, with deposits of tokenized real-world assets in DeFi lending protocols surpassing $840 million. The transition from theory to practice is evident in how tokenized assets are used in lending markets, with investors allocating these assets in ways that reflect broader market trends. Credit risk is becoming explicit, with emerging DeFi risk ratings frameworks introducing continuous, on-chain risk assessment.
For advisors, this reframes the role of tokenized assets, which are no longer just wrappers around existing products but can become productive collateral, generating additional yield and participating in broader strategies. However, some structural gaps remain, with corporate actions relying heavily on off-chain processes and illiquid assets not yet fully compatible with DeFi standards. As tokenization moves forward, it is essential to address these gaps and focus on interoperability, regulatory clarity, and efficiency to become a standard layer in global capital markets.