Wharton Warns 24/7 RWA Tokens Risk Liquidity Runs

A new report from the University of Pennsylvania’s Wharton School warns that tokenizing real-world assets for 24/7 trading creates a stability risk when the underlying assets can’t be priced or sold at the same speed.

The paper, published in May 2026 by Wharton’s Financial Policy and Regulation Initiative (WIFPR), argues that tokenization changes market access but not asset fundamentals. A tokenized private credit pool still carries default risk. A tokenized deposit is only as safe as the issuing bank. What shifts is trading venue, settlement speed, and programmability – not credit quality or cash flows.

The report’s central analytical tool is a “speed-matching” principle. Token trading velocity should not outrun the speed at which the underlying asset can be valued, sold, or redeemed. For U.S. Treasuries, gold, or large-cap equities, around-the-clock token trading is relatively safe because deep offchain reference markets and arbitrage can pull prices back toward fair value even when traditional venues are closed. The report cites near-0.99 correlation between tokenized gold and spot gold, and evidence that tokenized equities sometimes pre‑price weekend information ahead of Monday’s open.

The danger comes when “fast tokens” are built on “slow assets” – private credit, loans, real estate, private funds. If token holders can trade continuously while the underlying portfolio cannot be marked or liquidated in real time, the system can embed a run dynamic. Token prices can decouple from stale net asset values. Redemption promises can become discretionary or gated precisely when investors expect them to be enforceable.

The report splits tokenized assets into three broad categories: already-liquid instruments (Treasuries, gold, equities), money-like claims (stablecoins, tokenized deposits), and illiquid assets. The third category is where the speed-matching risk is highest. Tradability – the legal and technical ability to transfer a token – is not the same as liquidity, which is a market property that may disappear during stress.

By the numbers, public-blockchain RWAs (excluding stablecoins) stood at roughly $29 billion as of April 2026, rising to about $46 billion when Figure Technologies’ mortgage-related tokens are included. The top 10 issuers account for roughly 82% of the tracked value. One singular Figure token represents about 37% of the total in the dataset cited. Ethereum hosts about 54% of public‑blockchain RWA value, followed by BNB Chain at 13% and Solana at 7%.

The report flags concentration risk beyond issuer size. Operational and governance risk concentrates in a small set of custodians, oracle providers, and infrastructure platforms, creating clearinghouse-like exposures without the same supervisory perimeter found in traditional finance.

Oracles – the infrastructure that bridges offchain pricing data onchain – become single points of failure. The paper cites the October 2022 Mango Markets exploit, where thin liquidity and manipulated price feeds interacted with automated liquidation logic to produce roughly $117 million in losses. Cumulative DeFi security losses have already exceeded $6.9 billion.

On the regulatory side, WIFPR recommends supervising tokenized products by economic function rather than by the presence of blockchain. Money-like instruments need par redemption resilience and reserve rules. Illiquid assets require structures designed for illiquidity – closed-end funds, interval funds, auction-based exits – not stablecoin-style “always redeemable” promises. The report references the U.S. GENIUS Act (2025) as a function-based model for stablecoins but warns against mechanically applying the same template to all RWAs.

The paper’s practical recommendation for issuers and regulators is to sequence adoption. Start with liquid instruments like Treasuries and gold as a laboratory to harden custody, redemption, oracle design, and settlement workflows, then move into complex illiquid assets. Jumping directly into the hardest category, the authors warn, is the fastest path to a tokenization-driven liquidity shock.

The report also notes an upside: tokenized equity trading can broaden retail access. More than three-quarters of tokenized stock trades in one dataset were under $100, suggesting global participants use tokens as an entry point to international markets.

Wharton’s core warning is that tokenization can improve market access without rewriting financial reality. When fast tokens simulate liquidity for slow assets, familiar fragilities – runs, broken redemptions, incentive problems – can return, only at blockchain speed.