The Rise of Tokenized Products
- Eon Capital
- Aug 22
- 6 min read
Introduction
Financial markets are undergoing a major transformation, driven by demand for faster, more transparent, and inclusive systems. At the forefront are tokenization and stablecoins, powered by distributed ledger technology (DLT), streamlining transactions, boosting transparency, and unlocking opportunities across asset classes. In this recent quarter, traditional finance (TradFi) and crypto-native firms have been merging efforts, aligning on an efficient, interoperable global financial system by combining TradFi’s regulatory expertise with crypto’s technological innovations. With institutional support from the U.S.’s GENIUS and CLARITY Acts and advances in crypto infrastructure, stablecoins are transforming banking and capital markets.
Unlocking Financial Efficiency through Tokenization
Currently, TradFi grapples with inefficiencies such as sluggish cross-border payments and high intermediary fees. Tokenization and stablecoins can tackle these challenges by leveraging blockchains to eliminate middlemen, speed up settlement times, and lower costs. Tokenization creates unique digital tokens that can be stored, issued and traded on a blockchain, establishing a shared system of record with real-time data access. This reduces settlement risks and coordination inefficiencies of fragmented traditional systems, where delays and errors in reconciling ownership are common. Stablecoins, pegged to assets like the U.S. dollar and U.S. treasuries, executes secure payments onchain, ensuring reliability for tokenized asset trades. Together, they cut costs and enable seamless multi-asset operations, making markets more accessible. As of August 2025, $15 billion in real-world assets (RWAs) have been tokenized onchain, with stablecoins surpassing $250 billion, driven by strong institutional adoption and rising market confidence.1
Tokenization helps these tokens to be programmable, embedding rules like interest payments or redemption terms, using cryptographic framework to prevent fraud and validation of transactions. Smart contracts further enhance this by automating processes like trade settlements or interest distributions, reducing the need for intermediaries such as brokers or clearinghouses. Most recently, BlackRock tokenized its BUIDL money market fund on Ethereum, allowing institutional investors to trade fractional shares onchain, growing from $649 million to $2.9 billion in months.1
Stablecoins in Emerging Markets
Stablecoin Total Market Capitalization Reaches $250 Billion
In the current stablecoin market, Tether (62.51% market share) and USDC (24.18%) lead, with issuers like Circle holding $8 billion in cash and $53 billion in short-term U.S. Treasuries and repurchase agreements, providing liquidity to secure overnight borrowing markets.1 This evolution marks a shift from paper-based T+5 settlements pre-1980s to electronic T+2 systems in the 2000s, with tokenization now enabling instant settlement via smart contracts, automating tasks like dividend payments for a more efficient and accessible financial future.
In emerging markets like Nigeria, Turkey, and Argentina, where weak currencies, inflation, and capital controls like Argentina’s Cepo Cambiario limit dollar access, stablecoins serve as a vital savings tool. A Castle Island Ventures study found that 47% of users in these regions use stablecoins to save in dollars and 39% to convert local currency to dollars, bypassing regional banking constraints. In Nigeria, where inflation hit 34% recently, and Turkey, with similar currency devaluation, stablecoin adoption has surged 300%, offering a stable, dollar-based savings account for citizens.2 With 35 million monthly active stablecoin wallets, their role in providing dollar access without a bank account is fueling organic adoption, enabling more individuals and businesses to hold and transact USD-backed assets.1
Current developments highlight stablecoin momentum. In July 2025, Hong Kong issued its third tranche of tokenized bonds, and the UK launched a digital gilts pilot, streamlining debt management. The current EU’s MiCA framework, now live, boosted euro-pegged stablecoins like EURC, with PayPal’s PYUSD hitting $1 billion in circulation, showing widespread adoption.
Stablecoins Transforming Cross-Border Payments
Cross-Border Payment Workflow Using SWIFT
Tokenization of U.S. dollars has also become a reliable alternative payment stream, competing with traditional systems like SWIFT for cross-border transactions. Stablecoins can settle transactions in seconds compared to the days required by traditional T+2 systems, reducing intermediary fees and enhancing cost-efficiency for cross-border payments. For example, Bitso, a leading Latin American cryptocurrency exchange headquartered in Mexico City, currently facilitates 10% of the $64 billion U.S.-Mexico remittance corridor, streamlining transfers for millions to offer fast, cost-effective cross-border payments.1
Retailers such as Amazon and Walmart are exploring stablecoins payments via Stripe, seeking to cut into the $148 billion in annual card fees. This represents a larger trend of retailers shifting toward more cost-effective payment solutions like stablecoins, driving further adoption. With transactions reaching $1.1 billion a month, stablecoin issuers have emerged as major institutional investors, ranking as the 12th largest buyers of U.S. Treasury bills, a position that gives them growing influence over short-term yields and Treasury market dynamics.
Largest Holders of U.S. Treasuries by Country
Tokenization Across Asset Classes
Current use cases in financial sectors demonstrate tokenized assets' ability to strengthen global liquidity and accessibility:
Equity Markets
In public equity, tokenization improves transparency by embedding IPO listing criteria into tokens, ensuring equal access to information while enhancing price discovery and investor confidence. It tackles the massive challenge of corporate actions, with over 3.7 million annual event announcements in the U.S. alone costing firms $3–5 million each. A notable example is the 2025 Income Insurance Shareholder Liquidity Program on Singapore’s Alta Exchange, where 15,000 retail shareholders of a non-listed insurer gained access to a digital platform to trade 28 million tokenized shares worth SGD 600 million ($444 million). Within two weeks, over 1 million shares were offered for sale, with share values doubling from SGD 10 to SGD 20 ($7.50 to $15) on the first trading day, showing how tokenization unlocks liquidity for previously illiquid assets.3
Fixed Income Markets
In fixed-income markets, tokenization embeds issuance amounts, maturity dates, and coupon rates directly into tokens, improving transparency, tracking and compliance. According to a HKMA report, tokenized bonds improve operational efficiency, reducing underwriting fees by an average of 0.22% through automating manual tasks and eliminating intermediaries, managing fee negotiations and legal documentation.4 This improves the accessibility as tokenization lowers minimum buy-in thresholds, fractionalizing bonds to reduce entry barriers and create opportunities for retail investors. A key example is the World Bank’s 2025 issuance of €100 million ($114 million) in digitally native notes on Euroclear’s DLT-based Digital Financial Market Infrastructure (D-FMI) platform to fund sustainable development, enabling fully digital issuance and settlement while reducing operational risks and costs.3
Private Markets
In private debt and credit, tokenization provides real-time transparency into underlying assets, enabling investors to monitor transaction flows instantly. Smart contracts streamline back-office processes, reducing transaction costs and management fees. Simplifying private credit fund access and share trading expands accessibility, attracting a wider range of investors. For instance, in 2025, Apollo Global Management partnered with Securitize to tokenize a $500 million private credit fund on the Solana blockchain, lowering minimum investments and enabling investors to access and trade fractional shares, significantly broadening market reach.3
Real Estate
In real estate markets, valued at $379.7 trillion worldwide, participants grapple with unconnected record systems. Tokenization on public blockchains offers a solution by standardizing ownership records, creating transparent, verifiable ledgers. For example, In 2025, a district administration in India digitized 700,000 land records dating back to 1950 on the Avalanche blockchain, addressing challenges associated with information requests and record verifiability. Tokenization increases accessibility by fractionalizing high-value properties and enabling 24/7 trading, allowing anytime access to global markets. A prominent example is Thailand’s RealX token project, which tokenized funds from Revenue Sale and Transfer Agreements for three luxury condominiums in Bangkok. Launched on a permissioned TKX Chain with Bitkub Exchange, RealX raised over $60 million in two months, offering fractional ownership and a secondary market for real-time liquidity.3 By enabling fractional ownership, it enhances access to shared rent models and investable property, potentially unlocking DeFi market opportunities for lending or yield generation.
Final Thoughts
Tokenization and stablecoins are driving remarkable growth in user activity and market participation, cementing themselves as foundational building blocks of the financial world.These innovations create transparency, enable permissionless ownership, and broaden investor access, delivering cost and time savings that evolve capital markets. Realizing these benefits hinges on deep public-private collaboration to establish consistent guardrails and adapt market structures that enable safe open-network use. Traditional financial infrastructure, built on centralized intermediaries and fixed settlement cycles, ​​must evolve to embrace tokenization’s programmability. A balanced approach is essential, driving fair market access while preventing centralization of power among incumbents.
Challenges remain such as regulatory fragmentation and unclear onchain ownership rights. Policymakers must adopt technology-neutral standards to safeguard investors and manage risks, which can be achieved through widely accepted token standards and asset classification frameworks. For tokenized markets to thrive, liquidity providers and market makers need incentives such as lower fees, zero downtime, and quicker settlement times to make the shift and deepen secondary market activity. With collaborative efforts from key industry stakeholders to address these challenges, tokenization can transform global financial infrastructure, promising to fulfill the early vision that public blockchains set out to achieve.
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Disclosure: This post does not constitute investment advice and is for educational purposes only.