Emerging Market Economies To Drive Rwa Tokenization In 2026: Crypto...

Developing economies that lack entrenched financial market infrastructure will adopt tokenized real-world assets before developed countries.

The tokenized real-world asset (RWA) market will continue to grow in 2026, fueled by adoption in emerging market economies, according to Jesse Knutson, head of operations at crypto exchange Bitfinex.

Emerging market economies experience “friction” in capital formation and attracting foreign investment, Knutson told Cointelegraph

Tokenizing real-world assets, the process of representing physical or traditional assets on blockchain networks, fixes this by enabling onchain capital formation and bypassing traditional financial intermediaries, he said. Kunston added:

Tokenization also enables fractionalization of assets, democratizing access to investments that may be cost-prohibitive for the average retail investor, Knutson said.

Companies that can offer fixed returns to investors but cannot acquire traditional financing are the biggest beneficiaries of asset tokenization, he added

Fixed-income instruments, including US Treasuries and money market funds, are the most popular assets for tokenization in developed economies, while tokenizing real estate and commodities are the most popular use cases in developing economies, he said.

Knutson forecasts that the tokenized RWA total market capitalization will swell to several trillion dollars over the next decade, but the growth is dependent on major issuers moving from pilot programs and sandboxes to actual commercial products.

Related: Tokenization will disrupt finance faster than digital disrupted media: Crypto exec

Despite the positive outlook on the future of the RWA market, several challenges remain, including the legal enforceability of onchain contracts, ensuring enough liquidity for settlement without slippage, and creating investor protection frameworks, Knutson said.

Source: CoinTelegraph