Tokenization Isn't a Liquidity Silver Bullet: Why RWA Market Growth Masks Real Trading Gaps

Tokenization won't magically turn illiquid assets into tradeable instruments—and the crypto and blockchain industry needs to stop pretending it will.

That was the blunt message from executives at Paris Blockchain Week, who pushed back hard against the prevailing narrative that simply putting private credit, real estate, or other hard-to-move assets onchain automatically creates active secondary markets. We're seeing this disconnect play out in real time as the tokenized real-world asset (RWA) sector explodes in aggregate value while actual trading liquidity remains concentrated and thin.

The Misconception Problem

Speaking during a panel moderated by Cointelegraph CEO Yana Prikhodchenko, Oya Celiktemur, sales director for Europe, the Middle East and Africa at Ondo Finance, laid it out plainly: "I think there's still this idea that tokenizing something illiquid will somehow magically make it a liquid asset, which is just not true." She emphasized that assets like real estate and private credit "were never that liquid" to begin with—tokenization doesn't change the fundamental economics of trading them.

Francesco Ranieri Fabracci, head of tokenization expansion at Tether, echoed the sentiment with equal directness: "It's not that if you put an asset onchain, it will be liquid." He argued that only a narrower set of instruments—bonds, money market funds, and stablecoins—have realistic odds of achieving consistent liquidity in tokenized markets.

This distinction matters enormously for crypto portfolio managers and institutional traders evaluating RWA exposure. The market is at an inflection point, shifting from pure issuance growth (the easy part) toward whether tokenized products can actually move beyond limited distribution channels and attract meaningful secondary trading activity.

The Numbers Don't Tell the Whole Story

Data from RWA analytics platform RWA.xyz reveals explosive growth: the tokenized RWA market ballooned from $8.8 billion on April 16, 2025, to roughly $29.9 billion by April 16, 2026—more than tripling in just twelve months. That's the headline. Here's the reality check.

The growth concentrated heavily in standardized, widely-traded assets. Tokenized US Treasury debt and commodities dominated throughout the period, capturing the lion's share of inflows. These instruments benefit from pre-existing, robust trading infrastructure and price discovery mechanisms.

The more exotic categories? Still niche. Tokenized real estate grew from about $35 million to $296 million, while private equity expanded from nearly $60 million to $223 million. That's percentage growth that looks impressive in isolation. But in terms of actual market depth and trading volume relative to issuance, these segments remain illiquid by definition.

Asset-backed credit and corporate credit expanded sharply in absolute terms too, signaling that issuers are confident pushing new instruments onchain. Yet outstanding value tells us nothing about secondary market activity. Assets can grow from $60 million to $223 million purely through new issuance, with barely a ripple of actual trading between buyers and sellers.