Asset Tokenization: The Complete Guide

Corporate Finance and Strategic Advisory · CGPH Banque d’affaires

The tokenized real-world asset market nearly tripled over the past year, reaching $32.2 billion on-chain by June 2026¹ — genuine growth, and still a rounding error against the trillions of dollars the industry talks about tokenizing. Consulting and banking forecasts for where the market goes by 2030 range from roughly $2 trillion to $30 trillion, depending on assumptions.^{2 10} This guide explains, without the hype, what tokenization actually is, how it works step by step, how it differs from cryptocurrency, where the regulatory framework genuinely stands in the EU and Switzerland, which asset classes have truly scaled and which remain mostly narrative, and what a private capital advisor actually does within a tokenized structure.

What is asset tokenization?

Asset tokenization is the process of representing ownership rights in a real asset — a bond, a fund interest, a piece of real estate, a private credit position — as a digital token recorded on a blockchain, with a smart contract automating functions such as income distribution, governance, and transfer between holders.³ Critically, the token is not the asset itself: it is a digital representation of a legal position that must genuinely exist in the real world. In practice that legal position takes one of two main forms.

The claim-based route. A special purpose vehicle, trust, or fund structure holds the underlying asset, and the token represents a claim against that vehicle — a share, a note, a fund unit — whose legal documentation defines what the holder is entitled to. This is the route behind most institutional products on the market today, and it deliberately places the structure inside securities and fund law.

The direct-ownership route. The investor acquires legal title to the asset itself — alone or in co-ownership with others — under ordinary property law. There is no intermediate vehicle and no financial claim: the buyer becomes a genuine owner, the economic upside exists only if and when the asset is sold, and the token serves as a record of title. The authoritative register may sit off-chain with the blockchain as a synchronized mirror, or, where national law allows, on the ledger itself. In these structures, transfers of the underlying right follow ordinary civil-law formalities, and the platform’s role is that of registrar and administrator, not manager.

What both routes share is the real requirement: a genuine legal foundation. Tokenization without either an enforceable claim against a vehicle or a genuine transfer of title is not tokenization of a real asset at all; it is a digital collectible.

The claimed benefits are consistent across the industry: fractional ownership, breaking a high-value asset into smaller, more accessible units; faster settlement and around-the-clock tradability compared with traditional back-office processes; and transparency, since ownership and transaction records sit on a shared, tamper-resistant ledger rather than in siloed registries. Two caveats belong next to that list. First, whether those benefits translate into genuine liquidity for a given asset, as opposed to a digital wrapper around an asset that remains, in practice, illiquid, is the central open question the market is still working through — it is addressed directly below. Second, around-the-clock free tradability is a feature of some designs, not a defining property of tokenization: many well-built structures deliberately restrict circulation — approval clauses for new holders, qualified-investor-only access, prior KYC, transfers executed only through the platform’s registry — because controlled circulation is what keeps the structure inside its intended legal perimeter. In those designs, limited transferability is a structuring tool, not a defect.

How does asset tokenization work? Step by step

Stripped of vendor language, a serious tokenization project moves through six stages — and the order matters, because the legal work comes before the technology:

1. Define the asset and the structure. Identify precisely what is being tokenized and choose the structuring family: a claim against a vehicle that will hold the asset, or direct (co-)ownership of the asset itself. This single decision drives everything downstream — regulation, investor eligibility, transferability, tax.
2. Build the legal documentation. For a claim-based structure: the vehicle, its governing documents, and the instrument the token will represent. For direct ownership: the title-transfer mechanics, co-ownership governance (who decides on management and sale), custody arrangements, and the registry that records owners.
3. Choose the register and the rails. Decide what the authoritative record is — an off-chain register mirrored on-chain, or, where the law allows (France’s DEEP regime, Switzerland’s ledger-based securities), the distributed ledger itself — and select the blockchain and token standard accordingly.
4. Issue the tokens. Mint tokens that map one-to-one to the documented rights, with transfer restrictions, whitelisting, and compliance rules encoded where the structure requires them.
5. Onboard investors and distribute. KYC/AML checks, eligibility verification (professional or qualified investors where required), approval procedures for new holders, and subscription against the register.
6. Administer the lifecycle. Distributions where the instrument provides for them, register updates on each valid transfer, reporting, and — in direct-ownership structures — asset care, periodic revaluation, and the owner-decided disposal process.

Tokenization vs cryptocurrency: what is the difference?

A recurring point of confusion is worth resolving directly. Tokenization uses the same blockchain infrastructure as cryptocurrencies like Bitcoin, but it is a different category of activity. A cryptocurrency is typically a native digital asset with no underlying real-world claim attached to it; a tokenized security or fund interest is a digital representation of an existing legal and financial claim, regulated, where regulation exists, as the underlying asset would be. A tokenized bond is still a bond, and is treated as one by regulators, as the next section sets out. See our companion article on cryptocurrency: definition, impact and future prospects for a dedicated treatment of that distinct topic.

A brief history: from pilots to institutional infrastructure

• 2017–2019 — Early experiments. The first tokenized real estate and security token pilots emerge, mostly small-scale and largely outside the mainstream regulated financial system.
• 2019–2021 — The security token offering wave. A first generation of platforms attempts to tokenize private company shares and real estate directly; most struggle with the same problem — a token with no genuine secondary market is not meaningfully more liquid than the paper it replaced.
• 2021–2023 — Early institutional pilots, on different infrastructure. Major banks test tokenized bond issuance and settlement, but not on the same rails: JPMorgan runs tokenized repo and municipal-bond transactions on Onyx, its own private, permissioned blockchain, while Société Générale takes the opposite path, deliberately issuing its SG-Forge covered bonds and later structured products on public blockchains — first Ethereum, then Tezos — as an explicit proof point that public-chain settlement could work for regulated debt.
• March 2024 — The inflection point. BlackRock launches BUIDL, a tokenized US Treasury money market fund on Ethereum, lending the world’s largest asset manager’s name and operational credibility to the model. Franklin Templeton’s BENJI fund and Ondo Finance’s product suite follow the same institutional playbook.
• 2024–2026 — Extension into private markets. Apollo partners with Securitize to launch tokenized access to a private credit fund across six blockchain networks — Ethereum, Solana, Avalanche, Polygon, Aptos, and Ink — in January 2025;⁴ Hamilton Lane brings its Senior Credit Opportunities Fund on-chain via a tokenized feeder on Sei with KAIO in October 2025⁵ — signaling that tokenization’s next frontier is private capital, not just public fixed income.

Real-world asset (RWA) tokenization in 2026: what has actually scaled

The gap between tokenization’s most-discussed use case and its actual composition is significant. As of June 2026, the $32.2 billion tokenized real-world asset market breaks down as follows:¹

The pattern is consistent with how the technology has actually been adopted: tokenization has scaled fastest in the segment that needed it least — short-duration, already-liquid government securities — while the illiquid, operationally complex asset classes most often used to sell the concept — commercial real estate, private credit at scale, infrastructure — remain largely unproven at institutional scale. That is not a reason to dismiss the technology; it is a reason to be precise about what has actually been demonstrated versus what remains a thesis.

Asset tokenization regulation: MiCA, the DLT Pilot Regime, and Switzerland

For any European issuer or investor, the single most important regulatory fact about tokenization is one that is frequently misreported: the EU’s Markets in Crypto-Assets Regulation, or MiCA, does not cover security tokens.⁶ MiCA governs asset-referenced tokens, e-money tokens, and other crypto-assets that fall outside existing securities law. A tokenized bond, fund interest, or share is a security token, and is regulated instead under MiFID II, the Prospectus Regulation, national securities law, and — specifically for DLT-based trading and settlement — the DLT Pilot Regime, active since March 2023 and currently permitting DLT trading and settlement infrastructure for shares under €500 million market cap, bonds under €1 billion in issuance size, and UCITS units under €500 million in assets. The regime is now being reshaped in real time: ESMA’s June 2025 review recommended making it permanent and more flexible,⁷ and the European Commission’s December 2025 market-infrastructure package proposes removing the product-size thresholds, expanding eligibility to all MiFID II securities, and raising the aggregate cap per operator from €6 billion to €100 billion⁸ — a major expansion, if adopted, of what can run on regulated DLT market infrastructure.

What decides which regime applies is substance, not labels. ESMA’s guidelines on the qualification of crypto-assets as financial instruments, issued in December 2024, take an explicitly substance-over-form approach: a token conferring rights equivalent to a security — dividends, voting, a claim on liquidation proceeds — is a financial instrument regardless of the technology, while qualification is assessed case by case against criteria such as transferability, standardization into a class, and negotiability on capital markets.⁹

That same logic cuts in the other direction, and it matters for direct-ownership structures. A structure in which the investor holds genuine title to the asset, no return is promised, the economic upside arises only from a sale that the owners themselves decide, and the token has no autonomous circulation — transfers of the underlying right are perfected through ordinary civil-law formalities, with the register updated afterwards — is designed to sit outside MiFID II and outside MiCA, because there is neither a financial instrument nor a freely negotiable crypto-asset being offered. Two boundaries deserve respect in such designs. First, escaping securities law does not automatically escape MiCA: MiCA is the residual regime for fungible, transferable crypto-assets, so a “mere record” token that in practice circulates freely between wallets undermines its own rationale. Second, if the platform — rather than the owners — decides how the asset is managed, enhanced, and ultimately sold, the structure starts to resemble a collective investment undertaking, with requalification risk under fund regulation (AIFMD and national equivalents) regardless of how the token is characterized. The dividing line regulators probe is who makes the economic decisions: owners who instruct an administrator, or a platform that manages other people’s money.

One registry point is also frequently misunderstood. Keeping a traditional register alongside the blockchain record — the dual “paper plus chain” model — is in most jurisdictions a prudential choice, not a legal obligation. France went further than most: since its 2017–2019 blockchain reforms (the DEEP regime introduced by ordonnance and completed under the PACTE framework), the distributed ledger entry can itself constitute the authoritative legal register for unlisted securities. Elsewhere, including Italy for civil-law title transfers, the off-chain register or notarial formality remains the constitutive layer and the chain serves as synchronized evidence.

Switzerland, long a deliberate first-mover on this question, enacted its own DLT Act in 2021, creating a dedicated legal category for DLT-based securities and a licensing framework, supervised by FINMA, for DLT trading facilities — giving Swiss-domiciled structures a level of regulatory clarity that has made the country one of the preferred jurisdictions in Europe for tokenized fund and security structures.

The practical takeaway for any structuring decision is that the legal character of the underlying position does not change because it is tokenized. A tokenized bond needs a prospectus, or an exemption, like any other bond; a tokenized fund interest is still a fund interest subject to fund regulation; and direct ownership of a real asset remains governed by property law, with the token as its record. The blockchain is a settlement and record-keeping layer, not a way around securities law — and treating it as the latter is the most common structuring mistake in this market.

Where the market is really headed

Forecasts for the tokenized asset market by 2030 vary enormously depending on methodology and scope. Boston Consulting Group and ADDX’s widely cited 2022 estimate projects tokenized assets reaching $16 trillion by 2030, a roughly fifty-fold expansion from where the market stood at the time of that report.² Citi’s own, more conservative projection puts tokenized digital securities at $4–5 trillion by the same date.¹⁰ Across the range of publicly available forecasts, estimates span from roughly $2 trillion to $30 trillion — a spread wide enough that the specific number matters less than the consistent direction: every major forecaster expects meaningful, multi-trillion-dollar growth, from a base that, as of mid-2026, is still measured in the tens of billions. This is a genuine, early-stage structural trend in capital markets infrastructure, not, at this stage, a mature asset class with proven liquidity across every use case its promoters describe. The same question — how quickly institutional capital actually follows a structural thesis — runs through our Insights coverage of AIFI 2026: the future of private capital.

Why tokenization hasn’t scaled everywhere yet

The barriers are consistent across markets and worth stating plainly, because a credible advisor should be as clear about the constraints as about the opportunity:

• Liquidity is not automatic. A token trades exactly as often as there are real buyers and sellers for it; wrapping an illiquid asset in a token does not, by itself, create a market for that asset.
• Legal foundation complexity. Whether the structure is claim-based — the SPV, trust, or fund vehicle that holds the asset and against which the token represents an enforceable right — or direct-ownership — the title-transfer mechanics, co-ownership governance, custody arrangements, and registry that make each holder a genuine legal owner — getting it right across the relevant jurisdictions is a genuine legal engineering exercise, not an afterthought to the technology.
• Regulatory fragmentation. Even within the EU, security tokens, crypto-assets, and DLT market infrastructure sit under different, overlapping regimes — MiCA, MiFID II, the DLT Pilot Regime, national law — and jurisdictions outside the EU each have their own frameworks, Switzerland’s DLT Act being one of the more developed.
• Custody and operational risk. Private key management, smart contract security, and the operational resilience of the platform issuing and administering the tokens are new risk categories that did not exist in traditional custody arrangements. In direct-ownership structures of physical assets, secure physical custody — held demonstrably on behalf of the owners — is part of the same discipline.

One recent, concrete illustration of genuine progress in tokenizing harder, less liquid asset classes, as opposed to purely promotional progress, comes from within the same group’s own ecosystem: Altherum’s tokenized real-asset launch, covered in a separate Insights article, is a useful real-world case study of what building this kind of structure actually involves in practice, worth reading alongside this guide for anyone evaluating tokenization as a genuine option rather than a marketing exercise.

The role of an advisor in a tokenization strategy

For a company or investor evaluating tokenization, whether to raise capital, unlock liquidity in an existing asset, or access previously inaccessible private-market products, an experienced advisor’s role centers on separating the legal and financial fundamentals from the technology layer:

• Structuring the underlying legal position correctly, before any token is issued — choosing between a claim-based structure (the SPV, fund, or trust that defines what an investor owns) and a direct-ownership structure (genuine title in the asset, with governance that keeps economic decisions with the owners), and documenting it so the token records exactly what the law recognizes.
• Selecting the right regulatory route — including whether the structure belongs inside securities law at all: MiFID II and the Prospectus Regulation with the DLT Pilot Regime for security tokens, MiCA where a non-security crypto-asset is genuinely being offered, a property-law framework for direct ownership, or a non-EU regime such as Switzerland’s DLT Act — based on the asset, the investor base, and the jurisdictions involved.
• Designing circulation deliberately — approval clauses, investor eligibility, KYC gating, and registry mechanics that match the legal perimeter the structure is meant to stay inside, rather than defaulting to free transferability.
• Assessing genuine liquidity prospects honestly, rather than assuming tokenization itself manufactures a secondary market that would not otherwise exist for the underlying asset.
• Cross-border investor access and distribution, coordinating eligibility, marketing, and custody requirements across the jurisdictions where target investors are based.

Tokenization sits alongside the other routes to private capital covered in this Library — mergers and acquisitions, venture capital, private equity and private debt — and the choice between them is a structuring question before it is a technology question.

Sources

1. Market data platform RWA.xyz — app.rwa.xyz, June 2026 snapshot, as reported in Cryptonomist (8 July 2026) — en.cryptonomist.ch
2. BCG & ADDX, “Relevance of On-Chain Asset Tokenization” (2022) — addx.co
3. Chainalysis, “Asset Tokenization Explained” — chainalysis.com
4. Apollo & Securitize press release (January 2025) — securitize.io
5. PR Newswire, “Hamilton Lane Tokenized Private Credit Fund Launches on Sei Network via KAIO” (October 2025) — prnewswire.com
6. Regulation (EU) 2023/1114 (MiCA), Article 2(4) — eur-lex.europa.eu
7. ESMA, “ESMA suggests amendments to the DLT Pilot Regime to make it permanent” (June 2025) — esma.europa.eu
8. Ledger Insights, “EU Commission floats major DLT Pilot Regime upgrade” (December 2025) — ledgerinsights.com
9. ESMA, “Guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments” (17 December 2024) — esma.europa.eu
10. Citi GPS, “Money, Tokens and Games” (March 2023) — coverage: cointelegraph.com

This article is provided for general information purposes and does not constitute investment, legal, or regulatory advice. Tokenization regulation is evolving rapidly; market size figures and product-level statistics are as reported by the cited sources at the time of writing.