Rethinking the Liquidity Myth in Asset Tokenization

During the recent Paris Blockchain Week, a panel drew attention to a potential oversight in the field of asset tokenization: the assumption that converting real-world assets to tokens will naturally lead to heightened liquidity. Experts in the industry highlighted that although tokenization can facilitate access, it does not inherently solve liquidity issues for inherently low-liquidity assets such as private credit and real estate.

What Do Industry Experts Say?

Oya Çeliktemur, who serves as the Sales Director for Europe, Middle East, and Africa at Ondo Finance, clarified the misconception. She explained that while tokenization provides broader market access technically, it does not alter the inherent liquidity limitations of certain asset types. According to her, substantial liquidity is not achieved merely by placing these assets on the blockchain.

“There is still a widespread belief that tokenizing an illiquid asset will magically make it liquid, but this is not accurate. Real estate and private credit never had high liquidity in the first place,” stated Çeliktemur.

Francesco Ranieri Fabracci from Tether offered a similar view, noting that the mere act of tokenizing does not automatically render an asset tradable. He identified government bonds, money market funds, and stablecoins as asset classes with higher potential to ensure ongoing liquidity in digital markets.

Is Growth Equally Distributed?

The tokenized asset market has seen substantial growth, with figures climbing from $8.8 billion in 2025 to nearly $29.9 billion by 2026, according to RWA.xyz. Notably, standardized and popular assets like US Treasury bonds and commodities have primarily driven this expansion, benefiting from increased investor understanding and acceptance.

“A large part of this growth was driven by more standardized and easily traded assets like US Treasury bonds and commodities, which gained prominence thanks to greater investor understanding and wider market acceptance,” noted industry observers.

On the other hand, while less liquid segments like tokenized real estate and private equity have seen high growth rates, their market volumes remain relatively small, with modest increases from $35 million to $296 million and $60 million to $223 million, respectively.

Key conclusions from these findings indicate:

• Tokenization alone does not resolve liquidity challenges for inherently illiquid assets.
• The market continues to favor easily tradable and standardized assets.
• Growth does not necessarily equate to immediate market liquidity improvements.

Efforts are now shifting towards making tokenized products more genuinely tradable to capture a broader investor base, moving beyond the simple introduction of more assets in the market. The focus for the RWA sector is not just on listing new tokens but ensuring they are actively traded to achieve their liquidity goals.