We’ve been discussing tokenization for quite some time. Now, as we step into 2025 — with half of January already behind us — tokenization is actively reshaping the way we think about finance.
Recently, we covered a story on UAE real estate giant DAMAC venturing into tokenization. It’s a clear signal that it’s time to explore the endless possibilities the future holds for this transformative technology.
In simpler words, imagine buying a share of a high-rise building in Manhattan, owning a piece of a renewable energy project in California, or investing in a luxury car collection in Dubai — all through your smartphone and probably much lesser investment. This is the promise of tokenization, a tech that converts assets (digital or physical) like real estate, commodities, or financial instruments into digital tokens on a blockchain.
In 2024, tokenized assets reached a remarkable $50 billion in value, with real estate alone contributing over $30 billion. Experts predict that in 2025, tokenized real-world assets (RWAs) will surge to $500 billion, transforming global markets.
To give some background, here’s what happened last year.
The Rise of Tokenization in 2024
Last year saw a confluence of events that propelled tokenization into the mainstream.
BlackRock tokenized one of its funds, setting an industry standard for institutional participation.
Governments and regulators in regions like Europe, Singapore, and Switzerland introduced frameworks to support tokenized assets, encouraging adoption.
Dubai-based DAMAC Group committed to tokenizing $1 billion worth of real estate and other assets, signaling the Middle East’s growing interest in blockchain technologies.
As major players and regulatory bodies embraced tokenization, it became clear that this technology is the future of finance.
Predictions for 2025
With projections indicating tokenized assets will reach $500 billion by the end of 2025, we’re set to see an acceleration.
Real estate, corporate bonds, and infrastructure projects will dominate this growth. Tokenized real estate alone could account for more than $100 billion as developers worldwide explore blockchain for property sales and financing.
Large financial institutions are expected to tokenize everything from equities to private funds. The European Central Bank and major asset managers in Asia are piloting tokenization projects. Meanwhile, in the US, clearer regulations under the Trump administration are likely to spur institutional involvement.
Tokenization will democratize investment opportunities. Retail investors, once excluded from high-value assets like commercial real estate or luxury collectibles, will be able to buy fractions of these assets through tokens. This shift could lead to a broader investor base and increased financial inclusion globally.
DeFi platforms will increasingly incorporate tokenized RWAs. This means tokenized assets could be used as collateral for loans or traded in liquidity pools, unlocking new economic opportunities and creating a more integrated financial ecosystem.
Technological Advancements
TokenFi is working to make tokenization seamless and secure. Tools such as Chainlink’s proof of reserves will ensure that each tokenized asset is fully backed and transparent. Technologies enabling crosschain interoperability will also gain traction, allowing assets to move freely across different blockchains.
Challenges
The lack of consistent legal frameworks has slowed adoption, but in 2025, we could see significant progress in creating a clear, crypto-friendly regulatory environment.
Many potential investors are still unfamiliar with tokenization. Educational initiatives and user-friendly platforms will be crucial in bridging this gap bringing more participants into the ecosystem.
What Tokenization Could Look Like in 2025
Let’s explore a hypothetical scenario to understand the practical implications of tokenization.
Sarah, a teacher in Berlin, has always wanted to invest in real estate but couldn’t afford to buy a property outright. In 2025, she logs into a tokenization platform, selects a residential building in Paris, and buys $1,000 worth of tokens representing a share of the property.
These tokens entitle her to a portion of the rental income, which is deposited directly into her digital wallet every month. If she decides to sell her tokens, she can do so instantly on a decentralized exchange without needing a real estate agent or legal fees.
Similarly, businesses like DAMAC could tokenize their properties, allowing global investors to participate in Dubai’s booming real estate market.
David is an artist living in London. Traditionally, selling his artwork required him to find buyers through galleries or auctions, which charged hefty commissions. But in 2025, David tokenizes his latest painting on a blockchain. Each token represents partial ownership of the artwork, allowing him to sell fractions of the piece to art enthusiasts around the globe.
Investors from Tokyo to New York purchase tokens worth $10 each, making it affordable for more people to invest in fine art. These tokens also entitle holders to a share of profits if the painting is sold in the future. Everything is handled transparently through smart contracts, eliminating the need for middlemen.
Similarly, Sarah, a small coffee shop owner in Chicago, uses tokenization to expand her business. She tokenizes her shop, offering investors a chance to buy shares in her business. Each tokenholder earns a percentage of the shop’s monthly profits, which are distributed automatically via blockchain.
Overall, the future is tokenized!
