Regulators Scramble to Tame Tokenized Real-World Assets

Regulators worldwide are grappling with how to classify and regulate tokenized real-world assets (RWA), which have gained significant traction in recent years. The trend has been driven by the growing demand for fixed income products, tokenized money-market funds, and short-duration Treasury products.

According to McKinsey, a base case estimate of roughly 2 trillion USD in tokenized RWA is expected by 2030, with other institutional forecasts running much higher. Central banks are taking notice, as these assets can connect traditional finance to public blockchains, DeFi protocols, stablecoins, and cross-border settlement networks.

Regulators are approaching this new asset class with a technology-neutral approach, treating tokenized securities as traditional securities with a tokenization wrapper. In the US, for example, RWA tokens are regulated under the Securities Act of 1933, the Securities Exchange Act of 1934, and related SEC rules.

In Europe, the EU has implemented a clear legal split, where tokenized RWAs that are financial instruments under MiFID II are regulated under existing securities frameworks. Meanwhile, Hong Kong has issued explicit guidance for tokenized securities, treating them as securities under the Securities and Futures Ordinance.