Tokenization Won’t Magically Create Liquidity for RWAs, Paris Panel Warns

The tokenized real-world asset market has tripled to $29.9 billion over the past year, but industry executives are warning that bigger numbers don’t mean better liquidity—especially for assets that were hard to trade in the first place.

At Paris Blockchain Week on April 17, speakers from Ondo Finance and Tether challenged a persistent misconception in the RWA space: that blockchain technology can somehow transform illiquid investments into freely tradeable instruments.

“I think there’s still this idea that tokenizing something illiquid will somehow magically make it a liquid asset, which is just not true,” said Oya Celiktemur, Ondo Finance’s EMEA sales director. Real estate and private credit “were never that liquid” before tokenization, she noted, and putting them onchain doesn’t change that fundamental reality.

Francesco Ranieri Fabracci, Tether’s head of tokenization expansion, echoed the point. “It’s not that if you put an asset onchain, it will be liquid,” he said, arguing that only certain instrument types—bonds, money market funds, and stablecoins—are likely to see consistent secondary market activity.

The Numbers Tell Two Stories

Data from RWA.xyz illustrates the divide. The overall tokenized RWA market grew from $8.8 billion on April 16, 2025 to approximately $29.9 billion exactly one year later. But that growth was heavily concentrated in standardized, already-liquid assets like US Treasury debt and commodities.

Meanwhile, the categories most often cited as tokenization use cases showed different patterns. Tokenized real estate jumped from $35 million to $296 million—impressive percentage growth, but still a tiny slice of the market. Private equity climbed from roughly $60 million to $223 million.

The distinction matters because market value growth can come entirely from new issuance. More tokens existing doesn’t mean those tokens are actually changing hands on secondary markets.

What Actually Gets Traded

The panel’s skepticism points to a structural issue the RWA sector will need to address as it matures. Tokenization offers real benefits—faster settlement, fractional ownership, programmable compliance—but liquidity requires something blockchain rails alone can’t provide: buyers and sellers who want to trade.

For Treasury bills backed by the full faith and credit of the US government, finding those counterparties is straightforward. For a fractional interest in a commercial property or a slice of a private credit facility, the challenge remains what it always was: matching specialized buyers with complex, illiquid positions.

The conversation signals a shift in how the industry is framing tokenization’s value proposition. Rather than promising liquidity where none existed, the focus may increasingly turn to operational efficiency gains and expanded access—benefits that don’t require active secondary markets to deliver.

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