During Paris Blockchain Week, industry leaders emphasized that tokenization alone does not guarantee liquidity for traditionally hard-to-trade assets like private credit and real estate. Oya Celiktemur from Ondo Finance and Francesco Ranieri Fabracci of Tether highlighted the misconception that simply placing illiquid assets on blockchain platforms will create active secondary markets. They argued that only specific instruments, such as bonds and stablecoins, are likely to achieve consistent liquidity in tokenized formats.

Despite the tokenized real-world asset (RWA) market expanding from $8.8 billion to approximately $29.9 billion within a year, the growth has been primarily driven by more standardized assets like US Treasury debt and commodities. In contrast, tokenized real estate and private equity, while experiencing significant percentage growth, remain comparatively small in market value, underscoring that increased issuance does not equate to improved liquidity.

For market professionals, the key takeaway is that while tokenization is gaining traction, the focus should shift towards understanding the types of assets that can actually achieve liquidity in secondary markets, rather than assuming all tokenized assets will benefit equally.

Source: cointelegraph.com