Tokenization: From rejection to financial infrastructure

If you were around in 2014, the hostility was impossible to miss.

Banks did not just dislike Bitcoin; they wanted nothing to do with it. Accounts were closed without warning. Founders were dropped as clients overnight. Crypto startups were treated like compliance hazards rather than businesses. In the aftermath of Silk Road and amid growing regulatory panic, banks actively distanced themselves from Bitcoin companies, even when those companies followed the rules (Reuters, 2014; Wall Street Journal, 2014).

At the time, the goal was not thoughtful regulation. It was exclusion. Many in traditional finance openly argued that Bitcoin should not exist at all. That posture defined the early years of the industry.

So when people talked about tokenizing real-world assets back in 2015 or 2016, it sounded absurd. The idea that banks or asset managers would one day issue Treasuries, funds, or credit instruments on public blockchains would have been laughed out of any serious financial institution.

Yet the underlying thesis was already clear.

Blockchains offered programmable ownership, global settlement, and always-on markets. The problem was never the technology. It was the absence of legal clarity, institutional custody, risk management, and operational maturity.

That is why 2025 mattered.

Not because crypto finally won an ideological argument, but because the industry finally did the work required to be usable by serious capital.

2025: The Year Execution Replaced Storytelling

There was nothing flashy about 2025, and that was the signal.

Tokenized real-world assets moved out of pilots and into live production. Tokenized Treasuries, money-market-style products, private funds, and select real estate vehicles began operating on-chain in real size. By mid-2025, estimates placed the on-chain RWA market above $20 billion, with tokenized government securities leading adoption (Coinlaw, 2025; CoinDesk, 2025).

More important than the numbers was the participation.

Asset managers, broker-dealers, and financial institutions stopped treating tokenization as an experiment. Instead, they began integrating tokenized products alongside existing systems to improve settlement efficiency, enable programmable distributions, and broaden access to liquidity (AInvest, 2025).

This was not retail speculation driving growth. It was institutional execution.

Stablecoins Matured into a Regulated Financial Backbone

Stablecoins had already become essential to crypto markets before 2025. What changed was how regulators treated them.

In Europe, the Markets in Crypto-Assets Regulation introduced enforceable rules around reserves, disclosures, and issuer obligations. Stablecoins that failed to comply faced delistings or structural changes (European Commission, 2025; Brave New Coin, 2025).

In the United States, comprehensive federal legislation remained fragmented, but expectations converged around high-quality liquid reserves, audits, and clearer oversight of major issuers (Bastion Research, 2025).

As a result, stablecoins shifted from a regulatory gray zone to financial infrastructure.

Liquidity concentrated around fewer, more transparent issuers. At the same time, on-chain protocols quietly adapted to institutional realities, incorporating identity-aware access, compliance-compatible pools, and jurisdictional controls (EUCI, 2025).

The tradeoff was obvious. Greater stability came with increased centralization at the governance and reserve layers.

What Actually Worked in RWA Tokenization

By late 2025, the industry stopped pretending that every asset belonged on-chain.

The strongest traction emerged around lower-risk, yield-bearing instruments. Tokenized Treasuries, short-term credit, and fund shares translated cleanly into digital form and integrated naturally with on-chain markets (Coinlaw, 2025).

More complex assets followed, but with constraints.

Private credit, real estate, and bespoke investment vehicles benefited from fractional ownership and programmable distributions. They also introduced heavier legal and operational overhead. Tokenization did not eliminate complexity. It relocated it.

Technically, the lesson was consistent across deployments.
RWA tokenization is not primarily a smart contract challenge. It is an integration challenge. Cross-chain messaging and layered networks reduced costs and improved throughput, but enforceability depended on custodians, administrators, legal agreements, and oracle design (AInvest, 2025; PointsVille, 2024).

Code enforces rules. It does not invent them.

Stablecoins Became the Default Settlement Layer

By 2025, stablecoins were no longer optional infrastructure.

They functioned as settlement assets, collateral, and margin across crypto markets and increasingly alongside tokenized securities. Regulators responded by pulling major stablecoins into formal oversight regimes focused on reserves, audits, and systemic risk (Brave New Coin, 2025; Bastion Research, 2025).

This reshaped market structure.

Compliant issuers strengthened their position as opaque stablecoins struggled to meet regulatory standards. DeFi protocols optimized for assets institutions could actually use. The idea that scale would arrive without compliance quietly disappeared.

Convergence: The True Inflection Point of 2025

The most important shift of 2025 was the convergence of RWAs and stablecoins.

Tokenized funds and Treasuries became yield-bearing building blocks. Regulated stablecoins became the settlement layer that moved value between venues. Together, they formed an on-chain capital markets stack operating continuously and across borders (CoinDesk, 2025; Coinlaw, 2025).

This is where the old crypto versus traditional finance framing finally collapsed.

The question stopped being whether institutions would use blockchains. It became how quickly custody, compliance, settlement, and data standards could align into systems institutions already understood.

2026: The Year of Scalable, Responsible Growth

If 2025 proved on-chain finance could work, 2026 will test whether it can scale responsibly.

Projections place tokenized assets in the multi-trillion-dollar range by the end of the decade, led by government securities, funds, and high-grade credit, assuming legal and data standards mature in parallel (Binance Research, 2024).

Platform fragmentation is unlikely to survive this phase. Consolidation around licensed, globally connected venues is already underway.

Stablecoins will follow a similar path. Banks, fintechs, and asset managers are launching tokenized deposits and branded stablecoins, further blurring the line between traditional money and on-chain value (Brave New Coin, 2025).

For practitioners, the work ahead is deliberately unglamorous.

It means building products where tokenization is essential, not cosmetic. Aligning smart contracts with enforceable legal claims. Designing governance that survives audits, regulation, and real-world stress.

After writing about this space for nearly a decade, optimism today feels different.

Not louder. Not euphoric.
Just earned.