Real world assets (RWAs) are now defined as on-chain representations of ownership in traditional assets like real estate, debt, and equities. The trend of RWA tokenization saw a significant rise throughout 2024 due to several key developments:

• BlackRock's tokenization of a fund and its investment in a tokenization company.
• Banks and asset managers moving from concepts to active implementations.
• Licenses issued under the DLT Pilot Regime, such as the first ERIR in Spain.
• A growing recognition among crypto natives regarding the value of RWAs.

Crypto Long & Short newsletter is a weekly update with insights and analysis intended for professional investors. Expect to see tokenization solidify its presence in 2025, projected to exceed $500 billion of on-chain RWAs within the year.

This growth will be driven by developments in collateral mobility and the emergence of new complex financial products, enhancing market cap of tokenized RWAs. For example, real estate alone holds over $30 billion in potential through various tokenization strategies.

Regulatory clarity could be a game-changer, with anticipated leadership appointments increasing the odds for a solid legal framework for digital assets in the U.S., encouraging institutional participation and innovation.

Institutions are recognizing the significant cost savings and operational efficiencies brought by tokenization. As tokenization of financial assets continues to rise, the gap between crypto and traditional finance is expected to narrow, establishing tokenization as a core narrative of 2025.