RWAs are becoming more accessible via blockchain technology and shaping the direction of the industry. There is a wide range of applications for RWAs, including U.S. Treasuries, trade finance, real estate, and anything where ownership of a tangible item can be represented digitally on-chain.

Scroll to learn more about RWA tokenization and gain valuable insights about applications and use cases. Take advantage of the RWA resources available to you right here.

Overview

RWAs have existed in the blockchain space for several years serving as digital representations of off-chain assets. The effort to tokenize has recently gained traction with more traditional asset classes. 

RWAs have become a catalyst for network usage and digital asset adoption throughout all of blockchain technology. They create a gateway and a critical link between traditional finance and blockchain technology.

U.S. Tokenized Treasuries

Tokenized U.S. Treasuries represent a straightforward way to intersect traditional finance and digital assets. Typically backed by an exchange traded fund (ETF) with a large brokerage house, these RWAs are secured by U.S. Treasuries in the ETF that backs the RWA token. XDC Network hosts the USTY token that is secured by a Blackrock-managed U.S. Treasury ETF.

One year growth in treasury product market caps (RWA.xyz):

Tokenized Private Credit

Tokenization of private loans to businesses has been around since late 2020 and has seen some fluctuations in active loan values, rising to as high as $1.5 billion in June 2022. There are many sectors of loans — including real estate, auto, carbon, consumer, and fintech — and the average APR hovers near 9.5%.

Three year growth in active loan values (RWA.xyz):

RWA.xyz - a serious analytical tool

In these early days of real world asset tokenization (RWA), RWA.xyz has emerged as a leading tracking and analysis tool for major projects. The site markets its data and API solutions platform, but it offers much more than that upon exploration. A user can launch the dashboard and bring up a wealth of information related to tokenized products.

Currently, the site tracks tokenized U.S. treasuries, private credit, and stablecoins. On-screen reporting easily allows analysis of specific products, growth, market capitalizations, average yields and maturities. As well, the reporting includes relevant data for the various protocols and blockchain networks.

RWA World - another serious analytical tool

Real-world asset intelligence — RWA World’s robust database includes details on a range of projects throughout multiple RWA categories. They produce an annual report on the state of RWA and relevant articles on the subject. RWA World offers a subscriber newsletter.

RWA News & Insights

READ: Tracked U.S. treasuries and bond tokenizations have been somewhat of a boon since the zero interest rate environment ended in 2023

RWA.xyz published a tokenized treasuries report on their blog last year. In it, they highlight the appeal of the risk-free rate associated with U.S. Treasury yields and how they serve as a good option for stablecoin holders, which could lead to increased capital flow onto blockchains. Both crypto-native and traditional investors now have a new product with which they can diversify or explore crypto. As well, U.S. Treasuries are attractive to token issuers as a way to penetrate new investment markets. 

READ: U.S. Treasuries Spearhead Tokenization Boom by CoinDesk

The CoinDesk article makes a compelling case for RWAs to be a substantive part of the next crypto wave, spurring more inclusive adoption by traditional investors, such as banks and wealth management firms. As the landscape develops, Nils Behiling, COO of Tradeteq, projects increasing RWA adoption by the trade finance industry.  ‘“This is specifically interesting for people who are already in stablecoins, and looking for diversification, and who are looking for yield with very little risk,” says Nils Behling, COO of Tradeteq, a U.K.-based private debt and real-world asset marketplace.’

More news & insights

READ: RWA World Annual Report 2023. The 2023 report lays out key findings about the market and takes a deep dive into the database to present a detailed breakdown of all aspects of RWA tokenization.

RWA WORLD FACT: The majority, 33.5%, of tokenized asset protocols are currently domiciled in the United States, reflecting the ongoing dominance of the US in global financial affairs. However, 96% of Asian fund managers project tokenizing funds within the next three years.

Vantage Point: TradFi Increasingly Adopts Blockchain