Tokenization Won’t Boom Without Real Value |opinion
Asset tokenization is a big trend in the digital finance world, but unfortunately, it has yet to prove its practical value. While the blockchain community and developers have been touting the potential of tokenized assets, most investors – especially institutions – have remained on the sidelines. This is largely because the industry is focused on replicating traditional assets on-chain rather than making them more efficient, transparent, and accessible.
Don’t confuse digitization with revolution
Bringing traditional assets onto the blockchain – from real estate to bonds to stocks – sounds promising. However, most current applications are just “digitization” without actually “revolutionizing.” They don’t bring a tangible difference in liquidity, tradability, or access to investors. If tokenization is simply a technological coating on old financial products, it has no chance of creating real breakthroughs.
No Institutional Participation, Small Game
Although big names like BlackRock and JPMorgan have shown interest in tokenizing Real World Assets (RWA), actual implementation is still very limited. Legal complexity, lack of standardization, and technological barriers prevent fund managers and financial institutions from adopting it widely. It is difficult to imagine a traditional pension fund using a MetaMask wallet to interact with smart contracts on Ethereum.
Another reason for institutional investors' hesitation is the lack of effective risk assessment tools. Tokenization only makes sense when cryptoassets can be traded flexibly, priced accurately, used as collateral, or engaged in complex financial transactions.
Without a global regulatory framework, tokenization remains a local playground
One of the biggest obstacles to tokenization today is legal fragmentation. Each country and region has its own set of laws and standards. This not only creates huge compliance costs but also cripples the industry’s ability to scale. Just ensuring that tokenized assets in Abu Dhabi (ADGM) are compatible with regulations in Hong Kong (HKMA) is a huge challenge – let alone deploying them globally.
Without a common regulatory framework, the dream of a global digital financial system will never come true.
Tokenization must create new value – not just digital copies
Tokenization is not just a technology story, but also an opportunity to redesign the way we transact and manage assets. Smart contracts can automate dividend payments, deliver recurring profits, or allow assets to be collateralized instantly without intermediaries. But for this to happen, the financial system needs to be redesigned from the ground up, rather than trying to plug blockchain into legacy infrastructure.
Furthermore, if tokenization only opens up opportunities for “qualified” investors, it cannot be called a democratization of finance. Expanding access to retail investors – in a transparent, secure, and efficient way – is the right way to go.
Conclusion: Moving beyond the hype to reality
Tokenization has great potential, but that will be meaningless if the industry does not focus on solving the core problems: liquidity, accessibility, legal standards, and most importantly – the real value it brings to investors. We are at the beginning of a major transformation. For tokenization to truly take off before 2030, the digital finance industry needs to move beyond hype and toward sustainable value.
