Tokenization Is Already Changing Finance—Just Not Where Most People Are Looking

Tokenization has become one of those words that gets tossed around a lot in fintech circles, often next to terms like “blockchain” and “Web3.” But beyond the buzz, something meaningful is happening. What we’re actually starting to see is a new digital framework for handling real-world value. This isn’t about futuristic coins or NFTs—it’s about turning everyday assets into something programmable and tradable, without needing an overhaul of how those assets are structured at their core.

The idea is simple but powerful: you take an existing financial asset—like a loan, a share of real estate, or a government bond—and create a digital version of it on a blockchain. Once that happens, that asset becomes easier to move, quicker to settle, and more accessible to a broader range of investors. It’s not a new kind of value—it’s a new way of moving what’s already there.

Let’s break down where that’s starting to happen and which markets are quietly leading the way.

Private Credit Is Leading the Way

The private credit market, sitting at about $1.5 trillion globally, has been one of the first to seriously explore tokenization. Right now, only about $12 billion of that has been tokenized—less than 1%. Still, that small slice is showing what’s possible. Projects like Maple Finance, Centrifuge, Arch Lending, and Goldfinch are offering on-chain lending backed by digital collateral. Most of these are running on EVM-compatible blockchains like Ethereum and Polygon, with some exploring Solana.

This space is still small, but it’s moving fast. The daily trading volume for private credit sits between $1-2 billion, so even a modest shift onto blockchain rails could represent significant volume. Given how programmable and battle-tested Ethereum’s ecosystem is, it’s likely to remain a popular base layer for these early moves.

US Treasuries: Safe, Stable, and Going Digital

Few markets are bigger or more stable than US Treasuries—roughly $25 trillion in size, with about $600 billion trading daily. Yet even here, tokenization is starting to make inroads. Around $4 billion worth of Treasuries have been tokenized so far—still a sliver of the pie, but enough to show there’s real interest.

Ondo Finance is a standout in this space, offering tokenized Treasury products on EVM chains. Franklin Templeton has gone a different route, opting to use Hyperledger. The value here is simple: during volatile periods in crypto markets, it could become the norm for investors to instantly move into tokenized Treasuries, keeping yield and stability without leaving the ecosystem.

As more capital looks for a safe place inside blockchain-based finance, platforms offering fast, stable, yield-generating government debt could gain serious traction. EVM-compatible chains and Hyperledger are already laying the groundwork.

Tokenized Commodities: Gold, Oil, and Beyond

The global commodities market—everything from metals and oil to agriculture—is massive, valued at around $37 trillion. Despite that, only about $1 billion worth of commodities has been tokenized so far. That’s just 0.03% of the total market, and most of that is concentrated in tokenized gold.

Projects like PAX G on Ethereum and Cometec on XDC are early movers, showing that there’s potential to bring more of these assets on-chain. The real opportunity might be in how blockchains can handle complex contracts, like warehouse receipts, futures agreements, or physical delivery terms—features that go beyond simple spot trading.

Institutional Funds Are Starting to Dip Their Toes In

Hedge funds, mutual funds, and other managed portfolios represent a huge piece of the financial system—about $100 trillion globally. Right now, only a few billion dollars’ worth have been tokenized, but that’s starting to change. Securitize is building fund tokenization platforms on Layer 2 Ethereum solutions, while Arca and Franklin Templeton are experimenting on Hyperledger.

Fractional ownership, more efficient reporting, and reduced entry points are all perks of tokenizing these funds. Regulatory clarity is the sticking point, but as those rules get defined, we’re likely to see more movement here—especially from platforms already working within regulated frameworks.

Real Estate Might Move the Slowest—But the Potential Is Massive

At around $326 trillion, real estate is by far the largest asset class. But only about $3 billion of it has been tokenized so far. That’s partly due to complexity—there are title companies, escrow processes, banks, and regulatory frameworks that slow things down. But when those hurdles get lower, tokenized real estate could dramatically shorten transaction timelines and open up fractional investment to a broader audience.

Platforms like RealT, HoneyBricks, and Red Swan are showing what’s possible. Even if full deed tokenization is still a few steps away, we’re likely to see more SPV-based models in the meantime—structures where the token represents a share in a holding company that owns the asset, rather than the property itself.

Public Equities Could Be the Long-Term Prize

Global equity markets are valued at around $120 trillion, with daily trading volumes of about $500 billion. Despite that, just $15 billion worth of equities have been tokenized in publicly visible ways. That may sound small, but much of the work is happening behind the scenes.

Private chains like R3 Corda and projects like the DTCC’s Project Ion are building out the infrastructure for real-time settlement of stocks. That’s a big deal. Eliminating the T+1 settlement delay could reduce risks and operational costs. It could also help prevent another round of high-profile halts like we saw with GameStop and AMC.

Bonds: Quietly Building the Infrastructure

Bonds are the plumbing of the global financial system, and with $140 trillion in outstanding issuance, they’re too big to ignore. Only $15 billion worth has been tokenized so far, but institutions like HSBC, UBS, and SDX are already using private blockchains like Corda and Hyperledger to create digital versions of these instruments.

Because these networks allow for privacy between institutions while still providing blockchain settlement features, they’re likely to dominate in this space—especially for large issuances that require complex terms and confidentiality.

Specialized Markets Are Already Finding Their Home Chains

Some niche but meaningful markets are also being transformed through tokenization:

• Carbon Credits: Roughly 5% of the $2 billion market has already been tokenized. Platforms like Toucan Protocol and KlimaDAO are active here.

• Intellectual Property: With a $500 billion market size, IP rights are being tokenized by players like IPWE (on Hyperledger and Casper) and BitSong (music royalties on Cosmos).

• Luxury Vehicles: Only 0.08% of this $620 billion market has been tokenized, with early experiments from Curio Invest and CoinEarth.

• Collectibles & Art: These markets have slightly higher penetration, with platforms like Masterworks and Courtyard pushing fine art and collectibles onto chains like Ethereum and Polygon.

Stablecoins, Money Markets, and Insurance Are Laying the Groundwork

• Stablecoins: These now represent over $225 billion in circulation and are increasingly becoming the digital cash of blockchain networks.

• Money Markets: Franklin Templeton, Circle, and Arch are building tokenized versions, but so far it’s only $1.5 billion—barely a start in a $6.5 trillion sector.

• Insurance: Just $225 million tokenized so far in a market worth over $8 trillion, but the potential is enormous—especially for automating claims and accelerating payouts.

Derivatives Are the Sleeping Giant

This market dwarfs everything else, sitting somewhere between $1 and $2 quadrillion in notional value. Right now, just $5 billion has been tokenized. But the appeal is clear: tokenization could bring transparency to one of the most opaque corners of finance. Platforms like Injective and Synthetix are making early moves, and private solutions like Corda may end up dominating here too.

Which Blockchains Stand to Benefit the Most?

Here’s how things are shaping up in terms of who’s best positioned:

• XRP Ledger: Especially via its EVM sidechain and ties with Corda—great for settlement and institutional compatibility.

• Polygon (MATIC): A strong generalist across most asset types, especially due to its developer ecosystem.

• Stellar (XLM): Deep in Treasury tokenization, especially with Franklin Templeton’s work.

• Algorand (ALGO): Potential dark horse in IP rights and commodities.

• Avalanche (AVAX): Well-suited for private markets, especially with its subnet model.

• Hedera (HBAR): Playing well in carbon credits, stablecoins, and institutional tools.

• Provenance / Cosmos (HASH / ATOM): Focused on insurance and other permissioned-use cases.

The Big Picture

The shift to tokenized finance isn’t theoretical anymore—it’s happening. Slowly, in some corners, and very quickly in others. And the gains may not go to whoever yells the loudest but to the platforms solving real problems for big, old markets that have never moved quickly before.

If you’re trying to figure out where this is all headed, start by watching where the institutions are already placing their bets.