Tokenization: how bonds, funds and real estate move on-chain

What tokenizing an asset means

A token is an entry on a blockchain that records who holds how many units of something. For a cryptocurrency like bitcoin, the token is the asset. A real-world asset, often shortened to RWA, is different: the fund share, bond or building exists off-chain, and the token stands for a legal claim to it.

For that claim to hold, three things must line up. Someone must own and safeguard the underlying asset, usually a regulated custodian bank. Someone must keep the official register of owners, which after tokenization lives wholly or partly on a blockchain. And the law must recognize that register, so a court would treat the token holder as the owner.

The tokens usually carry rules in their code: a fund token may only move to identity-checked wallets, and the issuer or its transfer agent (the firm that keeps a fund's register) can usually freeze or reissue tokens if keys are lost or a court orders it.

Why institutions are doing it

Four advantages stand out:

• Faster settlement. Settlement is the moment money and asset actually change hands; US stocks settle one business day after the trade. On a shared ledger, the two can swap in seconds in a single step, called atomic settlement: either both legs happen or neither does.
• Fractional ownership. Tokens split easily. Dubai's property pilot sold stakes in properties from 2,000 dirhams, about US$545.
• 24/7 transfer. BlackRock says BUIDL tokens can move "24/7/365" between pre-approved investors, while ordinary fund shares move on business days.
• Programmability. Code can pay income automatically. BUIDL pays its daily-accrued dividends monthly as new tokens, and Franklin Templeton's fund mints new BENJI tokens into holders' wallets as yield accrues each day.

Real examples you can check

A few kinds of asset lead the way:

Tokenized funds

The biggest category holds short-term US government debt. BlackRock launched its USD Institutional Digital Liquidity Fund, BUIDL, on Ethereum on March 20, 2024, with Securitize as transfer agent and BNY Mellon as custodian. It invests in cash, Treasury bills and repurchase agreements, aims for a stable $1 per token, and is open only to qualified investors with a $5 million minimum. It has since spread to other chains, including Solana and BNB Chain.

Franklin Templeton got there first. Its Franklin OnChain U.S. Government Money Fund (ticker FOBXX, token BENJI) launched on Stellar in April 2021 as the first US-registered money-market fund to keep its official ownership record on a public blockchain. BENJI now runs on nine public chains. In August 2026, staff at the SEC, the US securities regulator, said they would not recommend enforcement action if Franklin Templeton's other funds held FOBXX shares with its transfer agent, which keeps the on-chain record, acting as custodian.

Tokenized bonds

The European Investment Bank issued a €100 million, two-year digital bond on Ethereum in April 2021, with the Banque de France representing the payment on-chain as central bank digital currency. In 2022 it followed with Project Venus, a euro bond on a private blockchain.

Hong Kong's government now issues digital bonds regularly. Its third sale, priced in November 2025, raised about HK$10 billion in four currencies and drew over HK$130 billion of orders. Two tranches could settle in tokenized central bank money, e-HKD and e-CNY, a world first according to the HKMA.

Tokenized real estate

In May 2025, the Dubai Land Department launched the region's first tokenized real estate project on the Prypco Mint platform. The tokens are tied to title deeds, recorded on the XRP Ledger and kept in sync with the land registry. The pilot was open only to UAE ID holders and paid in dirhams, not cryptocurrencies. Resale on a secondary market began on February 20, 2026.

Public or permissioned blockchains

A public blockchain such as Ethereum, Solana or Stellar lets anyone run a node and see every transaction. A permissioned blockchain admits only approved institutions. Issuers often mix the two: a fund can live on a public chain yet let its token move only between vetted wallets.

The line is blurring. When DTCC, which runs the main US securities depository, used tokenized securities in live trades on July 15, 2026, it did so on its private Besu network and on the Canton Network, which it calls public. More than 30 firms took part, and DTCC plans to launch the service in October 2026.

The legal wrapper: what makes a token a claim

Code alone cannot make you the owner of a Treasury bill or an apartment. The legal wrapper does: the fund documents, securities rules and property law that say the on-chain record counts.

Some countries have written this into statute. Switzerland created ledger-based securities in February 2021, and Germany's Electronic Securities Act of June 2021 allows crypto securities kept in a supervised blockchain register. In December 2025, a UK act confirmed that digital assets can be personal property in England, Wales and Northern Ireland.

In the US, SEC staff said in January 2026 that whether holders are recorded on-chain or off-chain "does not affect application of the federal securities laws." The statement separates tokens issued by or for the issuer from tokens made by third parties, which are either custodial (representing a security the third party holds) or synthetic (tracking a price with no claim on the issuer).

The risks

IOSCO, the global body of securities regulators, noted in November 2025 that the vast majority of tokenized transactions so far have been experiments or pilots, and warned of unclear ownership rights, cyberattacks and high costs. Liquidity takes time, too: Dubai's pilot waited nine months for a resale market.

Oracles, services that bring outside data such as prices or a fund's net asset value (NAV) on chain, matter too: a tokenized fund pledged as collateral is only as safe as its on-chain value. Oracle networks such as Chainlink offer feeds for reserves and NAV; we explain how they work in Oracles: how blockchains learn prices.

What regulators and the BIS say

Regulators agree that tokenization changes the technology, not the rules. The open question is which money settles the trades.

The Bank for International Settlements (BIS), the central banks' own bank, proposed a "unified ledger" in 2023: one programmable platform where tokenized central bank money, bank deposits and assets sit side by side, so a trade and its payment settle in one step. Its 2026 annual report keeps the idea, perhaps as "a system of interoperable networks," and argues that current stablecoins fall short of what makes money trustworthy.

Project Agorá tests this for cross-border payments. The BIS started it in April 2024 with seven central banks: the Bank of England, the Federal Reserve Bank of New York, the Bank of France for the Eurosystem, and the central banks of Japan, Korea, Mexico and Switzerland. The Bank of Canada has since joined, alongside more than 40 financial firms. In July 2026, 28 institutions made real payments worth about CHF 800,000 on the prototype, taking about 80 seconds on average from start to settlement.

In Europe, Pontes lets wholesale trades in tokenized assets settle in central bank money through the Eurosystem's TARGET services, and a longer-term program, Appia, aims for a blueprint by 2028.