How to Choose the Right Assets for Tokenization: A Practical Guide for Businesses

As the industry approaches 2026, tokenizing Real-World Assets (RWAs) has crystallized as the primary vector for modernizing the global financial system. 2026 is characterized by leading analysts at CoinShares as the “Year Utility Wins”. This shift is not merely a technological upgrade but a fundamental reimagining of how value is recorded, transferred, and managed on a global scale.

Market projections from Standard Chartered and Boston Consulting Group estimate the tokenized asset sector could swell to between $16 trillion and $30 trillion by the early 2030s. The question for institutional entrants has shifted from “why tokenizing physical assets?” to “how to tokenize effectively?”

In 2025, the market witnessed a bifurcation. Purely speculative crypto-assets faced increased volatility and regulatory headwinds, while assets grounded in economic reality (such as U.S. Treasuries, private credit, and infrastructure) are seeing explosive growth. The “flight to quality” is evident in the data, with tokenized U.S. Treasuries doubling in volume to over $8 billion in a single year, driven by investors seeking the “risk-free” rate on-chain. 

However, liquidity remains a paradox. While tokenization of assets technically enables 24/7 trading, it does not automatically generate market depth. Empirical studies indicate that without robust market-making and liquidity engineering, tokenized assets risk becoming “zombie tokens”—technically functional but economically stagnant.

Highlights

• The tokenized asset market is on a trajectory to exceed $16 trillion by 2030, but the winners in 2026 will be those who select assets with genuine economic utility rather than novelty.
• The U.S. Clarity Act and GENIUS Act have established distinct regulatory lanes for digital commodities and payment stablecoins, necessitating precise legal structuring before technical development begins.   
• For assets like real estate, integrating reliable oracles is non-negotiable to ensure token prices reflect real-world Net Asset Value (NAV), preventing arbitrage and loss of investor trust.   
• Technical execution requires a partner with specific experience in regulated securities; IdeaSoft’s portfolio, including work with Securitize and complex DeFi protocols, exemplifies the required depth.

Table of contents:

1. Why Businesses Are Turning to Asset Tokenization in 2026
2. What Assets Can Be Tokenized Today
3. Key Criteria for Choosing the Right Assets for Tokenization
4. What to Look for in a Tokenization Technology Partner
5. Common Mistakes Companies Make When Choosing Assets for Tokenization
6. Conclusion

Why Businesses Are Turning to Asset Tokenization in 2026

The convergence of blockchain technology with traditional asset management reached a tipping point in 2026.

The Liquidity Imperative in a Capital-Constrained World

The primary economic driver for the tokenization of assets remains the unlocking of liquidity in historically illiquid markets. Traditional asset classes such as commercial real estate (CRE), private equity (PE), and fine art suffer from a “liquidity discount”. Their value is suppressed because they are difficult to sell quickly without incurring significant transaction costs.

In traditional markets, selling a $50 million commercial building involves a labyrinth of brokers, lengthy due diligence periods, and substantial closing costs. This process can take months or even years. With real world assets tokenization, issuers can fractionalize this equity into millions of digital tokens, lowering the minimum investment threshold from $5 million to $50. This democratization expands the buyer pool from a handful of institutional funds to millions of retail and accredited investors globally, drastically increasing the velocity of capital.

Furthermore, the secondary market potential for these tokens creates a continuous liquidity event. Instead of waiting 7-10 years for a private equity fund to exit, investors can trade their tokenized LP (Limited Partner) positions on Alternative Trading Systems (ATS) or regulated Decentralized Exchanges (DEXs). This liquidity premium can arguably increase the underlying asset’s valuation by 20-30%.

The Institutionalization of DeFi and the “On-Chain Cash” Revolution

The entry of financial titans such as BlackRock, State Street, and JPMorgan into the tokenization space has legitimized the sector. 2026 is defined by the integration of Traditional Finance (TradFi) assets into Decentralized Finance (DeFi) rails.

A critical enabler has been the rise of yield-bearing “on-chain cash”. In previous cycles, investors holding stablecoins earned zero yield, representing a massive opportunity cost compared to risk-free rates in TradFi. The launch of tokenized Money Market Funds (MMFs) and U.S. Treasuries (exemplified by products like BlackRock’s BUIDL fund) allows investors to hold cash equivalents on-chain that yield returns while remaining liquid 24/7.

This development creates a symbiotic relationship. Investors can use tokenized Treasuries as collateral in DeFi lending protocols, effectively borrowing against their risk-free assets without liquidating them. This utility transforms tokenized real-world assets from static digital certificates into dynamic, composable financial instruments.

Regulatory Clarity: The Clarity and GENIUS Acts

For years, regulatory ambiguity served as a brake on institutional adoption. The legislative domain in 2026 has shifted dramatically, providing the “rules of the road” necessary for large-scale deployment of tokenized real world assets.

The Digital Asset Market Clarity Act (“Clarity Act”)

The U.S. Clarity Act has fundamentally resolved the “security vs. commodity” debate that plagued the industry. By creating distinct definitions for “Digital Commodities” (under CFTC jurisdiction) and “Investment Contract Assets” (under SEC jurisdiction), the Act allows issuers to structure their products with certainty.

What is the implication? Real-world assets tokenization projects can now proceed with clear guidelines on registration requirements, eliminating the fear of retroactive enforcement actions.

The GENIUS Act (Stablecoins)

The GENIUS Act establishes a federal framework for payment stablecoins, mandating 1:1 reserve backing with high-quality liquid assets (HQLA). This is crucial for RWA platforms because it provides a reliable, regulated settlement layer. Tokenized assets can now settle instantly against regulated stablecoins, removing the counterparty risk associated with unbacked algorithmic tokens.

Operational Efficiency and Automated Compliance

Beyond liquidity, the operational efficiencies introduced by blockchain are transformative. The traditional “T+2” settlement cycle (trade date plus two days) creates capital inefficiencies and counterparty risk. Tokenization enables atomic settlement, where the delivery of the asset and the payment occur simultaneously in a single transaction block.

Moreover, compliance is no longer a manual, ex-post check. Through standards like ERC-3643, compliance logic is embedded directly into the smart contract. A token representing a Reg D security “knows” who can hold it. If a non-accredited investor attempts to buy the token on a secondary market, the transaction reverts automatically. This programmatic compliance reduces administrative overhead and ensures that the asset remains compliant throughout its lifecycle, not just at issuance.

Market Growth Projections

The velocity of adoption is accelerating. The growth is driven not just by new crypto-native projects, but by the migration of existing securities to blockchain rails. The survey data from State Street indicates that over half of institutional investors expect to have significant digital asset exposure within their portfolios by the end of the decade.

What Assets Can Be Tokenized Today

The market has bifurcated into distinct categories where the technology offers clear value-add. This section provides an analysis of tokenizing physical assets, financial instruments, and intangible rights.

Physical Assets

Physical assets include real estate (commercial & residential), commodities (gold, metals, rare materials), art & collectibles, and infrastructure and machinery.

Real Estate (Commercial & Residential)

Real estate asset tokenization is the “crown jewel” of the RWA movement due to its immense size and inherent friction:

• Commercial Real Estate (CRE). Tokenization allows developers to crowd-source equity for new developments or refinance stabilized assets. By placing a $100M office tower into a Special Purpose Vehicle (SPV) and tokenizing the shares, developers can bypass traditional bank financing.
• Residential portfolios. Platforms have pioneered the tokenization of single-family rental portfolios. Investors can buy tokens representing a fraction of a house and receive daily rent payouts via stablecoins.
• Debt tokenization. Beyond equity, there is a surge in property tokenization debt (mortgages). This allows investors to act as the bank, earning fixed interest yields secured by the property.

Projects like RealT have faced scrutiny when the management of the physical assets (e.g., tax payments, tenant evictions) failed to match the efficiency of the digital layer. In Detroit, RealT faced lawsuits regarding code violations on properties that were tokenized, highlighting the disconnect between digital ownership and physical liability. 

Commodities (Gold, Metals, Rare Materials)

Commodities are ideal for tokenization due to their fungibility:

• Precious metals. Gold-backed tokens (e.g., Paxos Gold) have been successful. In 2026, we see the expansion into industrial metals like lithium and cobalt, critical for the EV supply chain.
• Provenance tracking. Tokenized commodities add a layer of supply chain transparency. A token representing a bar of gold can carry metadata about its origin, refining, and storage, ensuring it is “conflict-free”.

Art & Collectibles

High-value collectibles (fine art, vintage cars, rare whiskies) are classic “vanity assets” that are difficult to trade:

• Democratization. Tokenization allows a retail investor to own a 0.01% share of a Picasso or a 1963 Ferrari GTO. This transforms a strictly illiquid asset into a tradable portfolio component.
• Authentication. The NFT component serves as a digital certificate of authenticity, reducing fraud in the secondary market.

For art, provenance is everything. The blockchain provides an immutable record of the token’s history, but the link to the physical art depends on trust in the custodian. If the painting is a forgery, the token is worthless. This sector requires “museum-grade” custody and insurance, which adds significant operational costs (OPEX) that can eat into investor returns.

Infrastructure and Machinery

A growing trend is the tokenization of revenue-generating infrastructure:

• Energy. Solar farms and wind turbines are being tokenized, where the token represents a claim on the energy produced (and sold to the grid).
• Heavy machinery. “Asset-light” models allow construction firms to tokenize expensive machinery, selling usage rights or revenue shares to investors to fund the purchase.

Financial Assets

Financial assets include bonds, funds, and treasuries, invoices and private credit, and insurance products.

Bonds, Funds, and Treasuries

This category has seen the most explosive volume growth, driven by institutional demand for safe, yield-bearing collateral:

• Tokenized treasuries. Short-term U.S. Treasury bills tokenized on-chain offer a “risk-free” rate to crypto natives.
• Money Market Funds (MMFs). These funds operate 24/7, unlike traditional MMFs that close on weekends. This continuous liquidity is essential for global trading firms.

These are typically structured as tokenized funds. The user deposits stablecoins; the fund manager converts to fiat and buys the T-Bills; the user receives a token representing their share.

The critical success factor here is “composability”. It is the ability to use the Treasury token as collateral in other DeFi protocols, which requires strict adherence to standard interfaces like ERC-20 while maintaining regulatory whitelisting.

Invoices and Private Credit

Private credit involves lending to businesses that cannot access public bond markets:

• Factoring. Companies can tokenize their accounts receivable (invoices). Investors buy these invoice tokens at a discount, providing immediate working capital to the company. When the invoice is paid, the investor receives the full amount.
• SME lending. Tokenization allows for the pooling of small business loans, spreading default risk across a diversified portfolio.

Developing platforms for private credit requires sophisticated “calculation engines” that can handle variable interest rates and amortization schedules. IdeaSoft’s experience in building fintech solutions like Securitize, involving complex financial logic, ensures that the on-chain representation matches the off-chain legal obligation to the penny.

Insurance Products

Catastrophe bonds and reinsurance contracts are being tokenized to allow capital markets to directly fund insurance risks. Smart contracts can automate payouts based on “parametric” triggers (e.g., wind speed data from an oracle), eliminating the claims adjustment process.

Digital & Intangible Assets

Digital & intangible assets include Intellectual Property (IP) rights, carbon credits, and data/datasets.

Intellectual Property (IP) Rights

A rapidly growing niche involves tokenizing future cash flows from patents, music royalties, or pharmaceutical IP:

• Music & entertainment. Artists are tokenizing future royalty streams, effectively IPOing their catalogs.
• Patents. Pharmaceutical and tech companies can tokenize revenue streams from specific patents, allowing them to monetize R&D upfront.

 If the revenue is generated digitally (e.g., Spotify streams), the payment can be automated via smart contracts, creating a seamless “stream-to-wallet” experience. This reduces the leakage of value to intermediaries like collection societies.

Carbon Credits

The voluntary carbon market has suffered from opacity and double-counting. Tokenizing carbon credits ensures that once a credit is “retired” (claimed for an offset), it is burned on-chain and cannot be resold. This brings much-needed integrity to ESG reporting.

Data and Datasets

In the age of AI, data is a valuable commodity. Owners of high-quality datasets can tokenize access rights, allowing AI companies to purchase training data in a granular, traceable manner. This creates a new market for “data liquidity”.

Key Criteria for Choosing the Right Assets for Tokenization

Tokenization is expensive. It is not for every project.

Generally, real world assets tokenization becomes economically viable for raises above $10 million. Below this, the setup costs erode the benefits of the lower cost of capital.

Before writing a single line of code, asset owners must validate their asset against these six critical dimensions. A failure in any one of these areas can render the project unviable.

Legal and Regulatory Feasibility

The legal wrapper is the foundation of the token. If the legal link between the digital token and the physical asset is weak, the token is worthless.

The issuer must demonstrate a clear, unencumbered title to the asset. For real estate, this involves rigorous title searches. The asset must typically be moved into a Special Purpose Vehicle (SPV), and the shares of the SPV are what get tokenized. You are rarely tokenizing the deed directly.

Jurisdictional strategy:

• United States. Under the Clarity Act, most RWA tokens are “Investment Contract Assets” regulated by the SEC. Issuers must use exemptions like Regulation D (for accredited investors) or Regulation S (for non-US investors) to avoid the burden of a full public registration.
• European Union. The MiCA (Markets in Crypto-Assets) regulation provides a unified licensing regime. However, tokenized securities often fall under MiFID II, requiring prospectus approval.
• Singapore. Through Project Guardian, the MAS has created highly efficient structures for tokenized funds, particularly using the VCC (Variable Capital Company) model. It segregates assets and liabilities efficiently.
• China. A strict “No-Go” zone. Tokenization is viewed as illegal fundraising. Projects must geofence China to avoid severe penalties.

A major scaling challenge of tokenizing real world assets is selling a token globally. A token compliant in Singapore might be illegal in the US. This requires integrating dynamic KYC/AML providers (like Sumsub) that can adjust their verification rigor based on the user’s IP address and declared residence.

Market Demand and Liquidity Potential

Tokenization creates the technical capacity for liquidity, but it does not create market demand: 

• The liquidity illusion. A common fallacy is that tokenizing a distressed or undesirable asset (e.g., a vacant office building in a declining market) will make it sellable. It will not. Tokenization adds a premium to desirable assets by making them easier to access. It does not fix fundamental asset quality issues.
• Secondary market viability. Where will the token trade? “Zombie tokens” are those that are issued but have nowhere to trade. Issuers must partner with Alternative Trading Systems (ATS) in the US or licensed exchanges globally to ensure there is a venue for liquidity.
• Market makers. Successful projects engage market makers to provide liquidity (bid/ask depth) on these exchanges. Without this, the spread will be too wide for investors to exit positions.

The ultimate goal is to make the RWA token usable as collateral in DeFi (e.g., borrowing USDC against a tokenized building). This requires the token to be fungible and widely trusted. Protocols like Ondo Finance have pioneered this, allowing their tokenized treasuries to be used in lending markets. This “financial Lego” approach exponentially increases the utility of the asset.

Asset Valuation Stability

How the asset is valued determines how the token is priced on the secondary market.

Public stocks have real-time pricing. Private real estate is appraised annually. To trade a real estate token daily, you need a mechanism to estimate its daily price. This creates a disconnect. Iff the token trades at $1.00 but the NAV (Net Asset Value) is only updated once a year, massive arbitrage opportunities or pricing inefficiencies arise.

High-quality RWA platforms use Oracles (like Chainlink) to feed real-time or frequent data points into the valuation model. For commodities, this is the live spot prices. For real estate, it might be automated valuation models (AVMs) based on comparable sales.

Divisibility & Fractionalization Potential

Here, we highlight 2 points within tokenizing physical assets:

• Ticket size vs. gas costs. There is a technical floor to fractionalization. If you sell tokens for $10, but the transaction fee (gas) on Ethereum is $15, the economics fail.
• Layer 2 strategy. To enable micro-investing (e.g., $50 entry), platforms must use Layer 2 blockchains (like Polygon, Base, or Optimism) where transaction fees are negligible (<$0.01). IdeaSoft’s deployment of the Moonwin platform on Polygon demonstrates the necessity of low-fee environments for high-volume, low-value transactions.

Risk Profile and Insurance Considerations

Institutional investors will not accept “self-custody” on a Ledger Nano S. The platform must use Qualified Custodians:

• Physical custody risk. For commodities (gold, wine), the physical asset must be secured in a bonded warehouse. The token holder bears the risk of theft or damage.
• Insurance integration. The SPV must carry comprehensive insurance. Advanced platforms integrate the insurance policy into the smart contract metadata, so investors can verify that the asset is insured in real-time.
• Smart contract risk. The code itself is a risk vector. A bug in the dividend distribution logic could result in millions of lost yield. Rigorous audits by reputable firms are mandatory.

IdeaSoft’s development services include integrating MPC providers via API. This allows the platform to have “programmatic custody”. For example, it can automatically move funds to cold storage if a wallet balance exceeds a certain threshold, or require 3-of-5 executive approvals for any withdrawal over $100,000.

What to Look for in a Tokenization Technology Partner

Choosing a technology partner for tokenizing real world assets is a strategic decision. An RWA platform is 20% blockchain code and 80% legal/financial workflow automation. IdeaSoft distinguishes itself as a premier partner through its deep specialization in this niche.

Experience with Regulated Markets

Building a DEX for meme coins is radically different from building a platform for regulated securities. The partner must understand Reg D, transfer restrictions, and accreditation.

IdeaSoft was instrumental in the development of Securitize, one of the few SEC-registered transfer agents and a global leader in digital securities. This experience ensures we understand how to code regulatory constraints directly into the token.

Knowledge of Blockchain Protocols Suited for Tokenization

A partner should guide you to the right chain. Public chains (Ethereum, Polygon) offer liquidity. Private chains (Hyperledger, Quorum) offer privacy. IdeaSoft has experience across the spectrum, from deploying public protocols to building private, permissioned ledgers for enterprise clients.

At the same time, the future of tokenizing physical assets is multi-chain. IdeaSoft builds with interoperability in mind, ensuring assets aren’t trapped on one network.

Ability to Build Compliant KYC/AML & Investor Onboarding Workflows

Compliance is the “killer feature”. IdeaSoft creates investor dashboards that seamlessly integrate with identity providers (like Onfido or Sumsub). Our systems handle the entire lifecycle:

1. Document upload;
2. Facial recognition;
3. AML Screening;
4. Wallet Whitelisting;
5. Token Issuance.

This reduces investor drop-off while ensuring strict compliance.

Integration with Custodians and Asset Oracles

For assets requiring dynamic valuation (e.g., rebalancing a tokenized portfolio based on real-time prices), IdeaSoft uses Chainlink oracles. Our experience in DeFi and gaming projects (like Moonwin) proves our ability to integrate tamper-proof data feeds, a critical requirement for maintaining trust in asset pricing.

We integrate with institutional custodians (like BitGo or Fireblocks) to ensure that the digital assets are held securely. This way, we support multi-signature governance schemes.

Long-Term Platform Maintenance and Scaling

Tokenization of assets implies that RWA platforms must handle millions of transactions as they scale. Our work with GlobalLedger on AML compliance demonstrates the ability to process vast datasets in real-time.

Common Mistakes Companies Make When Choosing Assets for Tokenization

Even with the best technology, property tokenization projects can fail due to strategic errors in asset selection.

Ignoring Legal Restrictions (“Code is Law” Fallacy)

Some entrepreneurs believe that blockchain exempts them from securities laws. This is fatal. If you issue a token that functions as a security without registering it (or filing for an exemption), you face:

• SEC enforcement;
• Massive fines;
• Rescission orders (being forced to refund all investors).

Compliance must come before code.

Tokenizing Assets Without Real Demand

Real estate asset tokenization is a force multiplier, not a magic wand. If you tokenize a niche asset that only appeals to 5 people, putting it on a blockchain won’t make 5,000 people want it. The asset must have a broader addressable market that is currently hindered only by access friction.

Underestimating Technical Complexity

Many firms try to build “in-house” with generalist web developers. They often fail to implement correct token standards (like ERC-3643 for compliance) or mess up the “transfer restriction” logic. This leads to security vulnerabilities and platforms that cannot be legally used. Using a specialized partner like IdeaSoft mitigates this execution risk.

Choosing the Wrong Blockchain

Launching a high-frequency trading asset on the Ethereum Mainnet ensures failure due to gas costs. Conversely, launching a public security on a private blockchain creates a “walled garden” with no secondary liquidity. The chain selection must align with the economic model of tokenized real world assets.

Poor Due Diligence > Valuation Problems

Failing to establish a robust valuation mechanism leads to the token trading at a discount to NAV. If investors cannot verify the asset’s value in real-time (via oracles or transparent reports), they will price in a “trust discount. As a result, this will destroy the value proposition of the token.

Conclusion

As we approach the latter half of the decade, the tokenization of real world assets represents the most significant opportunity in capital markets. The convergence of regulatory clarity through the Clarity Act, institutional adoption by giants like BlackRock, and the maturation of blockchain infrastructure has set the stage for explosive growth.

However, tokenizing physical assets rewards precision. Success is not determined by the novelty of the technology but by the rigor of Asset Selection. The winners will be those who identify assets where liquidity is constrained by friction, not by a lack of fundamental value. They will be the ones who build legal structures that are robust enough to withstand regulatory scrutiny and technical architectures that are secure enough to hold billions in value.

IdeaSoft stands ready to be the partner in this journey. Our advantages:

• Proven track record in building platforms like Securitize;
• Deep expertise in Chainlink oracle integration;
• Comprehensive understanding of the compliance domain.

IdeaSoft bridges the gap between the vision of tokenization of assets and the reality of a deployed, profitable platform.