RWA stands for real-world assets. In crypto, it refers to assets such as gold, property and government bonds represented by digital tokens on a blockchain.
Take gold as an example. A company stores gold in a vault and issues tokens linked to it. An investor can buy and hold those tokens in a digital wallet while the gold stays in storage. Creating these digital representations of assets is called RWA tokenisation.
What the investor owns depends on the product. A token might represent ownership of stored gold or shares in a fund that buys government bonds. The product’s terms explain what the holder receives and how they can get their money back.
What Assets Can Be Tokenised?
Gold is one example, but tokenisation also applies to financial assets such as bonds, investment funds and loans. The table below shows what different tokens can represent and what investors should check.
| Asset category | What a token might represent | What needs checking |
|---|---|---|
| Gold | Rights to allocated gold held in a vault | Custody, allocation and redemption conditions |
| Government debt | A bond or a share in a fund investing in government securities | Whether the holder owns the security directly or owns fund shares |
| Real estate | Equity or debt in a company that owns property | Property ownership, income rights and restrictions on exit |
| Private credit | An interest in a loan or credit fund | Borrower risk, repayment terms and responsibility for servicing |
| Public equities | A share or a separate instrument linked to its value | Voting rights, dividends and exposure to intermediaries |
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These are only possible structures, rather than interchangeable forms of ownership. The label “RWA” alone does not establish which one of them applies.
How Does RWA Tokenisation Work?
The details vary by asset and jurisdiction, but a tokenised product generally needs five connected elements so it can work.
1. Define the asset and the holder’s rights
The issuer determines what the token represents. For example, a property project might issue shares in a company that owns a building. The investor would then own an interest in that company.
Product documents should identify the issuer, the rights attached to the investment and the rules governing them.
2. Establish custody and administration
The asset behind the token still needs someone to look after it. Gold must be stored in a vault, while a fund needs someone to hold its investments and keep track of its shareholders. Safeguarding assets on behalf of investors is known as custody.
The blockchain records who holds the tokens, but separate arrangements are needed to protect and manage the assets behind them.
3. Issue the tokens
The issuer creates tokens using blockchain software. Smart contracts can record balances and apply rules, such as allowing transfers only between approved wallets.
Using a public blockchain does not necessarily make the investment open to everyone. For example, the Franklin OnChain U.S. Government Money Fund prospectus describes a permissioned system on public blockchain networks, with approved wallets and administrative controls.
As a result, an investor may need approval before they can buy or receive the tokens, even if the blockchain itself is publicly accessible.
4. Distribute and transfer the investment
Eligible investors acquire tokens through the channels permitted for that product. Identity checks, minimum investment amounts and geographical restrictions may apply.
Transferring a token to another approved holder is also different from selling it. A sale needs a willing buyer and an agreed price.
5. Manage income and exit
The product needs a process for any income distributions, repayments or redemption. Redemption means returning the token or investment interest through the issuer’s process in exchange for the relevant proceeds or asset, subject to its terms.
Investors should distinguish that route from selling to another investor on a secondary market. The timing, costs and eligibility requirements can differ.
Examples of Real-World Asset Tokenisation
Three existing products show why understanding the phenomenon matters more than recognising the RWA label.
Franklin Templeton’s BENJI: tokenised fund shares
The Franklin OnChain U.S. Government Money Fund uses a blockchain-integrated system to maintain its official share ownership records. Franklin Templeton identifies each share with a BENJI token in its explanation of the fund.
According to it, the investor holds fund shares and they do not personally own a specific Treasury security in the portfolio. The fund’s investments, fees and shareholder rights remain governed by its documents.
This example is a great illustration of how tokenisation can change the recordkeeping and transfer system while retaining a familiar investment structure.
Pax Gold: a token linked to physical gold
Under the PAX Gold terms, each PAXG token corresponds to one fine troy ounce of London Good Delivery gold.
However, holding a small quantity of PAXG does not mean a holder can request delivery of an equally small piece of a gold bar. The terms set a minimum of 430 PAXG, plus fees, to initiate redemption for a London Good Delivery bar, with excess tokens credited after the actual bar weight is determined.
The example separates two questions: what backs the token, and which redemption options a particular holder can use.
BlackRock’s BUIDL: tokenisation with controlled market access
BlackRock’s USD Institutional Digital Liquidity Fund, or BUIDL, launched in March 2024 with Securitize as its tokenisation provider, according to Securitize’s announcement.
A February 2026 integration announcement describes trading through UniswapX technology using quotes from approved market participants. Investors using the service must be pre-qualified and allowlisted through Securitize.
This is an example of blockchain trading technology used within defined participation rules.
What Are the Benefits of RWA Tokenisation?
Tokenisation can help financial products use shared records, automate selected tasks and support different ways to transfer investment interests.
The Bank of England identifies potential advantages including faster transactions, automated payments and the ability to divide investments into smaller units. Whether a particular product delivers these benefits depends on its design.
For a reader assessing an RWA product, three tests are useful:
- Access: Does the product actually reduce the minimum investment, and who is eligible to buy it?
- Efficiency: Which step takes less time or costs less than the existing process?
- Use: Can the token be transferred, redeemed or accepted as collateral by the intended counterparties?
A token that moves quickly can still sit inside a slow investment process. Equally, a product with restricted access may offer useful efficiencies to the institutions eligible to use it. The comparison needs to match the intended customer.
What Are the Risks of Tokenised Real-World Assets?
An RWA token retains exposure to its underlying investment and can add risks associated with the token, its service providers and the technology.
Underlying asset risk. A borrower can default, property income can fall and gold prices can decline. And even recording an investment on a blockchain does not remove these possibilities.
Legal and counterparty risk. The holder’s ability to enforce a claim depends on the documents and relevant law. Custodians, issuers and other intermediaries may also fail to meet their obligations.
Liquidity risk. The ability to transfer a token does not establish that a buyer is available. Redemption may follow a separate timetable or impose conditions.
Technology risk. Smart contract vulnerabilities, lost access credentials and network disruptions can affect a product even when the underlying asset remains intact.
The BIS Financial Stability Institute’s summary of tokenisation risks highlights that tokens may appear more liquid than their reference assets, creating pressure when holders seek redemption. It also cautions that potential benefits can involve trade-offs.
How to Read an RWA Project’s Claims
At RWA Summit Singapore 2026, our team heard repeated scrutiny of what happens after token issuance: whether buyers exist, how rights are enforced and where financial benefits appear.
Alina Sysoeva, Drofa Comms‘ Head of PR and Crisis Communications Lead, moderated a panel on institutional PayFi that examined the connection between traditional finance, digital assets and on-chain settlement.
For our communications work, the core idea is to explain the financial product with the same care as the technology. When an RWA company asks us to help promote its project, the communications strategy needs to identify its intended audience, substantiate its claims and explain its limitations consistently.
The following checklist reflects our editorial approach to assessing those claims:
| Project claim | Information that should accompany it |
|---|---|
| “Asset-backed” | The asset, custodian, holder’s legal rights and method of verifying backing |
| “Fractional ownership” | What is divided: direct ownership, company shares, fund units or another claim |
| “24/7 trading” | The venue, eligible participants and distinction between trading and redemption hours |
| “Improved liquidity” | The actual exit route, available buyers or liquidity providers, and relevant limits |
| “Lower costs” | The process used for comparison and the fees included in the calculation |
| “Available globally” | The jurisdictions and investor categories in which the product may be offered |
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This information gives journalists something they can verify and helps prospective investors understand the offer before approaching the company. We explore the broader requirements in our article on what institutional investors expect from RWA projects.
To understand an RWA product, start with the asset behind it, what the token gives its holder and how they can get their money back. These details help explain what tokenisation changes and if those changes offer a useful benefit.
