Tokenization Fails to Guarantee RWA Liquidity, Experts Warn

Industry executives at Paris Blockchain Week have challenged the prevailing narrative that the tokenization of real-world assets (RWAs) inherently generates liquid secondary markets. While the migration of private credit and real estate onto public blockchains has accelerated, panelists emphasized that technical accessibility does not equate to market depth.

The Liquidity Gap in Tokenized Assets

The discussion highlighted a fundamental disconnect between the digitization of assets and the presence of active buyers and sellers. Participants noted that placing an asset on a blockchain ledger solves for transparency and settlement efficiency, but it fails to address the underlying lack of demand for niche or illiquid private instruments. Without established market makers and standardized secondary trading venues, tokenized assets often remain stagnant regardless of their onchain status.

Regulatory and Structural Hurdles

Beyond the lack of participants, the panel pointed to fragmented regulatory frameworks as a primary barrier to building deep liquidity pools. Different jurisdictions maintain distinct requirements for the transfer and ownership of tokenized securities, which prevents the formation of global order books. This fragmentation forces many tokenized projects into siloed environments where capital remains locked rather than flowing freely between participants.

As firms like Flow Capital move credit funds to platforms such as DigiFT, the industry continues to test whether blockchain infrastructure can overcome these structural limitations. For now, the consensus remains that tokenization is a tool for operational efficiency rather than a catalyst for immediate market liquidity in the crypto market analysis sector.