What is tokenization? Real-world assets on-chain, from Treasuries to stocks, explained

Who this is for: Fund managers, treasurers, founders and policy staff who need to understand what changes when an asset’s ownership record moves on-chain, which asset classes have real volume in late 2026, and how to judge whether a tokenized product is a security with a clean legal chain or a wrapper with a long one.

Tokenization is the process of representing a conventional asset as a token on a blockchain so that it can be held, transferred and settled with the same infrastructure crypto uses. The word covers a lot of ground, from a $2 billion Treasury fund to a fractionalized apartment building, and the quality of the products varies just as widely. The useful way to think about it is not “putting assets on a blockchain” but “issuing a new form of the asset whose record of ownership lives on a shared ledger instead of in a transfer agent’s database.”

Why does this matter in October 2026 rather than as a perpetual someday? Three things changed in the past 18 months. The GENIUS Act, signed in July 2025, created a federal framework for payment stablecoins and barred issuers from paying yield, which pushed working capital toward tokenized funds. The SEC’s September 17, 2026 innovation exemption gave tokenized US stocks a legal venue for the first time. And the market data crossed thresholds that incumbents cannot ignore: RWA.xyz recorded 5.1 million holders of tokenized assets on October 6, 2026, up 44% in 30 days, most of them holders of tokenized stocks.

This guide explains how a tokenized asset is built, what changes and what does not, where the legal risk sits, how each asset class is doing on current figures, what the SEC, DTCC and the exchanges are doing, and how to evaluate a product, with a worked example of tokenizing a $100 million private credit fund.

Tokenization by the numbers

How a tokenized fund is built

Take the model that has worked. An asset manager sets up a fund that holds short-dated US Treasuries and cash. A transfer agent, in most of the large cases Securitize, keeps the official shareholder register, but that register is written to a blockchain rather than a private database. Investors who pass the fund’s onboarding, which includes identity checks and accreditation where required, receive tokens in a whitelisted wallet. The tokens can only move between wallets the transfer agent has approved, so the fund never loses control of who its investors are. Yield accrues daily and is paid either by minting new tokens or by adjusting the token’s value, depending on the design. Redemption returns dollars or, increasingly, a stablecoin, often within the same day.

The participants and what each one does

1. The issuer or sponsor sets up the legal vehicle (a Delaware statutory trust, a BVI or Cayman fund, a Luxembourg vehicle) and decides what rights the token carries.
2. The custodian holds the underlying asset off-chain: the Treasuries sit at BNY or a similar custodian, not “in” the token. Read our custody guide for how that differs from holding the token itself.
3. The transfer agent maintains the register of owners. In a tokenized fund the on-chain balances are the register, or are reconciled to it daily. This is the piece the SEC’s September 1, 2026 proposal would modernize, with Chairman Atkins citing the use of blockchain technology in share transfers as a reason to revisit rules last rewritten in the late 1970s and early 1980s.
4. The smart contract enforces transfer restrictions, pays out yield and lets the issuer freeze or force-transfer tokens when the law requires it.
5. Distribution venues include the issuer’s own portal, broker-dealers, crypto exchanges that accept the token as collateral, and DeFi protocols that use it in lending markets.
6. Oracles and data providers publish net asset value on-chain so that other contracts can price the token; this is what DTCC and Chainlink tested in the Smart NAV pilot reported in May 2024.

The products that scaled

BlackRock’s USD Institutional Digital Liquidity Fund, known by its ticker BUIDL, launched on Ethereum in March 2024 and expanded to several other chains; it held about $2.25 billion on October 6, 2026 per RWA.xyz and is accepted as collateral on venues including Crypto.com and Deribit, according to CoinDesk reporting from September 28, 2026. Franklin Templeton’s OnChain US Government Money Fund (BENJI) had been running since 2021 and was the first US-registered fund to record share ownership on a public chain; its institutional iBENJI share class held $1.71 billion and the original BENJI $751 million on October 6, 2026. Circle’s USYC and Ondo’s USDY were slightly larger than BUIDL on the same date, and WisdomTree, JPMorgan, Invesco, ChinaAMC and Janus Henderson all run products above $300 million. The issuers are now the incumbents, not the challengers.

Together the tokenized Treasury category grew from under $1 billion at the start of 2024 to $14.8 billion by October 2026, still small against the multi-trillion dollar money market industry but large enough that the incumbents took it seriously. The category was down 6.6% over the 30 days to October 6, 2026, a reminder that these are cash management products whose balances move with trading demand for collateral, not a one-way adoption curve. For the mechanics of how these funds compete with stablecoin yield, see stablecoin yield vs tokenized money market funds.

What is really different

The asset inside is identical. What changes is the plumbing around it. Traditional fund shares settle on T+1 or T+2 during business hours through a chain of intermediaries. A tokenized share settles in seconds, at 3 a.m. on a Sunday if needed, directly between two wallets. A trader holding a tokenized Treasury fund can post it as margin on a venue that also accepts stablecoins, earn the Treasury yield while it sits there, and sell it for a stablecoin the moment they need cash, all without leaving the chain. That is why the first real demand came from crypto-native firms who were previously forced to hold non-yielding stablecoins as their working capital, and why the GENIUS Act’s ban on stablecoin issuers paying yield pushed even more of that capital toward tokenized funds.

The collateral use case is where this is most visible. Franklin Templeton announced on September 28, 2026 that Bybit would accept its tokenized money market fund shares, then yielding 3.7% annualized on a seven-day basis, as collateral for stablecoin borrowing, joining Binance and OKX, with the underlying held off-exchange at a regulated custodian. DTCC’s president Brian Steele told CoinDesk in January 2026 that collateral is the first port of call for tokenization because the impact is measurable today: a Treasury that can be pledged at any hour frees balance sheet that was parked waiting for the next settlement window. Wall Street firms completed the first 24/7 US Treasury financing via tokenization on the Canton Network, with USDC as the cash leg, in August 2025.

Programmability is the second difference. Because the token is software, the issuer can encode transfer restrictions, automate dividend or coupon payments and integrate directly with lending protocols. BlackRock’s October 2026 move with Ondo Finance to tokenize three model portfolios into single transferable tokens shows where this leads: a whole strategy, rebalanced by the manager, that can be held in one wallet position, used as collateral or embedded in another product. Bitwise launched automated token portfolios with Coinbase and Glider in August 2026 on the same logic. The flip side is that the token can also be frozen or clawed back by the issuer, which is a compliance feature to a regulator and a consideration for a holder.

What does not change

Credit risk, interest rate risk, and the liquidity of the underlying do not change. A tokenized private credit fund still holds loans that mature on their own schedule; CCS’s September 2026 research report across 31 founder interviews found redemption windows of 60 to 180 days remain typical for tokenized real-world assets. A tokenized stock still only has a reference price when the primary market is open; the SEC’s exemption requires venues to halt when the underlying stock halts for exactly that reason. And the tax treatment follows the asset, so a tokenized Treasury fund is still a fund for US tax purposes (see US crypto tax rules).

Where the legal risk sits

A token is a claim, and the strength of the claim depends on the structure behind it. The questions to ask are the same ones a fund lawyer asks about any wrapper. Does the token represent direct ownership of the fund share, or a derivative claim on an intermediary that owns the share? If the issuer fails, is the asset bankruptcy-remote? Which law governs, and has any court actually enforced a tokenized claim under it? For the large regulated funds the answers are clear because the token simply is the share, recorded by a registered transfer agent. For products that tokenize a claim on a special purpose vehicle that holds a claim on an asset, the chain of ownership is longer and each link deserves scrutiny.

Direct, sponsored and synthetic

The tokenized stock market made this distinction concrete in 2026. Three models coexist. In the direct model the issuer or its transfer agent records the token holder as the shareholder of record, with voting and dividend rights. In the sponsored or custodial model a broker-dealer holds the shares one-for-one and issues tokens backed by them, passing through dividends and, in the better designs, voting; this is how the OKX and ICE joint venture OKXICE described its planned venue in its October 5, 2026 notice to the SEC. In the synthetic model the token tracks the price but the holder has no claim on the share at all. A public dispute between AMC’s chief executive and Robinhood over whether Robinhood’s European stock tokens conferred shareholder rights illustrated why this matters, and on September 24, 2026 Bullish, Equiniti, Alpaca, Apex Fintech Solutions and DriveWealth formed the Issuer Sponsored Token Coalition to set standards for tokens that link to the official register.

Regulation follows the asset rather than the technology. A tokenized security is still a security; the SEC has said so repeatedly, and its 2025 and 2026 shift toward accommodating tokenized issuance came through exemptive relief and staff guidance rather than a change in that principle. The September 17, 2026 innovation exemption is explicit that anti-fraud and anti-manipulation provisions apply in full and that only tokens conferring identical rights to the traditional share qualify. Europe’s DLT Pilot Regime, in force since March 23, 2023, and the UK’s Digital Securities Sandbox created controlled environments for trading tokenized securities on regulated venues, with ESMA’s thresholds set at shares below EUR 500 million in market capitalization, bonds below EUR 1 billion and UCITS below EUR 500 million in assets. Our MiCA guide covers how that regime sits alongside the crypto-asset rules.

Beyond Treasuries: credit, stocks, funds and commodities

Private credit

Private credit is the second category with real volume. RWA.xyz tracked $8.0 billion of tokenized credit across 2,653 assets and 197,844 holders on October 6, 2026, with STOKR ($1.6 billion), Maple ($973 million), Hastra ($648 million), Centrifuge ($638 million) and Realiz ($500 million) the largest platforms by on-chain value. Figure, which originates home equity lines on its Provenance blockchain and reports more than $30 billion of equity unlocked for over 382,000 households, built one of the largest tokenized asset books by origination even though much of it sits outside the public-chain trackers. Janus Henderson’s tokenized AAA CLO fund, JAAA, held $588 million and Apollo’s ACRED tokenized credit fund $95 million on the same date. Centrifuge’s Jeroen Offerijns walked CCS through how loan pools are structured on-chain, and Cap’s Benjamin Sarquis Peillard framed the opportunity against a $1.7 trillion private credit market in May 2026.

Stocks

Tokenized stocks returned in 2025 through Kraken’s xStocks (issued by Backed) and Robinhood’s European stock tokens, both launched at the end of June 2025 for non-US investors, and Ondo Global Markets later that year. By October 5, 2026 RWA.xyz counted 7,847 tokenized stock products worth $3.20 billion, up 10% in 30 days, held by 4.26 million wallets, up 53% in 30 days. Ondo led with $927 million across 408 assets, followed by bStocks ($855 million), xStocks ($585 million across 1,271 assets), Securitize ($417 million, mostly its own tokenized share SECZ at $336 million) and Robinhood ($144 million across 189 assets). Robinhood launched its own chain on July 1, 2026 and told CCS on September 29, 2026 that it had reached $1.6 billion in total value locked with 190 stock tokens and more than 70% of stock token trading happening outside exchange hours. The SEC’s innovation exemption now opens a US path; see tokenized stocks and pre-IPO tokens explained for the product-level detail.

Funds and private markets

Tokenized fund interests extend beyond money markets. Blockchain Capital’s BCAP fund token held $949 million on October 6, 2026 per RWA.xyz. On September 24, 2026 ARK Invest and Securitize announced a tokenized version of the ARK Venture Fund on Ethereum, giving on-chain holders exposure to a portfolio that includes OpenAI, Anthropic, Stripe and Databricks, with Securitize handling issuance, daily NAV and the investor experience. Securitize itself went public in June 2026 and its stock SECZ nearly doubled in the week after the September 17 exemption, per CoinDesk. The SEC’s September 30, 2026 proposals to widen retail access to private investments through interval fund modernization run in parallel and will shape how many of these vehicles can be sold to non-accredited investors.

Commodities and real estate

Tokenized gold is the one physical asset with scale: Tether’s XAUT held $2.9 billion and Paxos’s PAXG $1.8 billion on October 6, 2026. Real estate, art and other commodities have been tokenized for years with little liquidity to show for it; RWA.xyz’s tokenized real estate figure was $92 million on the same date. CCS’s research report found physical assets fell from half of RWA interview topics in 2025 to 6% in 2026 while stocks, funds and credit rose from 21% to 59%. That points to the general rule: tokenization adds value where the asset is already standardized and liquid and the constraint was settlement, not where the asset was illiquid to begin with.

The plumbing: SEC, DTCC, Nasdaq and the exchanges

The things that decide whether tokenization becomes market infrastructure rather than a product category are dull and important: custodians supporting tokenized share classes, DTCC connecting to public chains, the SEC landing its exemption and rulemaking, and stablecoins becoming the default cash leg. Between late 2025 and October 2026 every one of those moved.

The SEC’s innovation exemption

On September 17, 2026 the SEC issued a conditional five-year exemption under Section 36(a)(1) of the Exchange Act that lets a “Tokenized Securities Venue” (TSV) operate permissioned automated market maker liquidity pools in tokenized NMS stock without registering as an exchange, and lets liquidity providers supplying their own capital to those pools avoid the dealer definition. The conditions are strict: limits on the number of symbols and on volume; a requirement that the venue verify the tokenized stock carries the same rights as the traditional share; written notice to the issuer with a chance to object before a third-party tokenization trades; smart contracts that are auditable, public and deployed on a public permissionless ledger; trading halts mirroring the primary exchange; public disclosure of the venue’s and its affiliates’ trading activity; and a 30-day website notice before launch. Chairman Paul Atkins framed it as a bridge, saying “This interim measure must be followed by durable rulemaking,” and noted the agency acted after Congress failed to advance the CLARITY Act, which had passed the House in July 2025. Commissioner Hester Peirce, who left the Commission on October 1, 2026, supported the order as tailoring the rules to the innovation rather than the reverse. The order invites comment on modifications and the agency has also proposed, on October 1, 2026, a crypto custody framework for advisers and funds that would admit state trust companies as qualified custodians (see our guide to SEC vs CFTC jurisdiction).

The first filings followed within weeks. OKXICE, a 50-50 joint venture between OKX and Intercontinental Exchange formed in June 2026, notified the SEC on October 5, 2026 of plans for a 24/7 venue trading more than 60 US stocks, including Nvidia, Tesla, Apple and Coinbase, on OKX’s XLayer blockchain using Uniswap’s technology, settled in USDC, USDT and USDG, with tokens backed one-for-one by shares at a registered broker-dealer and a 30-day objection window for issuers. At least one named company, Cerebras, objected. On the derivatives side, Cboe and S&P Dow Jones Indices extended their licensing deal on September 29, 2026 to allow exploration of tokenized options, and the CFTC said on September 24, 2026 that derivatives firms may invest in tokenized assets and keep blockchain-based records.

DTCC

The Depository Trust & Clearing Corporation, which custodies the US equity and Treasury market, unveiled a tokenized collateral platform in April 2025, selected Digital Asset’s Canton Network in December 2025 to tokenize a subset of DTC-custodied Treasuries after receiving a no-action letter from SEC staff, and said it was targeting a minimum viable product in a controlled production environment in the first half of 2026. In January 2026 president Brian Steele said the goal is to make all 1.4 million DTC-eligible securities available in tokenized form on an opt-in basis, with conversion between traditional and tokenized formats taking about 15 minutes, and that DTCC would not dictate which wallet or blockchain clients use. In May 2026 DTCC announced a partnership with Chainlink on 24/7 collateral management. DTCC also co-chairs the Canton Foundation with Euroclear. If this works, a tokenized stock traded on a TSV and a book-entry share at DTC become two formats of the same security rather than two products.

Nasdaq and the exchanges

Nasdaq filed a proposed rule change with the SEC in September 2025 to allow its listed securities to trade in tokenized form with the same CUSIP and rights as the underlying share, settled through DTC. Through 2026 it has pushed its market data on-chain, distributing its TotalView feed via Pyth from June 2026 and powering on-chain equity perpetuals from May 2026. The SEC’s September 17 exemption took a different route from the Nasdaq proposal, favouring new permissionless-ledger venues rather than tokenized trading on the registered exchanges themselves, and the SEC held a roundtable on 24-hour trading the same day. How those two tracks converge, and whether the tokens that trade on a TSV are DTC-eligible securities in tokenized format or broker-held wrappers, is the central open question for 2027. For how IPOs and listings are adapting, see crypto IPOs and SEC filings explained.

How we got here: a timeline

Worked example: tokenizing a $100 million private credit fund

How to evaluate a tokenized asset: a checklist

• What exactly does the token entitle me to? Direct ownership recorded by a registered transfer agent is the gold standard. A claim on an SPV that holds a claim on a custodian is weaker at every link. If the answer is “price exposure”, it is a synthetic, not a tokenized asset.
• Who holds the underlying and is it bankruptcy-remote? Ask for the custodian’s name, the legal opinion and whether the assets are segregated from the issuer’s balance sheet.
• Which regulator supervises the issuer and under what exemption or registration? A 1940 Act fund, a Reg D feeder, an EU DLT Pilot venue and an offshore wrapper carry very different protections.
• How is NAV struck and published? Daily on-chain NAV from an administrator via a reputable oracle is good; an issuer-posted spreadsheet is not.
• How do I get out? Compare the stated redemption window (same day for Treasury funds, 60 to 180 days for most credit per CCS’s 2026 report) with the liquidity of the underlying, and check whether a secondary market inside the whitelist actually trades.
• Can the issuer freeze or claw back tokens, and under what rules? Every compliant security token can. The question is whether the triggers are documented and limited to legal requirements.
• Which chain, and what happens if it fails? Multi-chain issuance with a transfer agent that can re-mint on another ledger protects against a chain outage; a single permissioned chain controlled by the issuer concentrates risk.
• Is the smart contract audited and public? The SEC’s September 2026 exemption requires auditable, public contracts on permissionless ledgers for stock venues; apply the same standard to funds.
• Who else holds it and why? A Treasury token used as collateral on three exchanges has a demand base; a token with a few dozen holders and no integrations is a private placement with extra steps.

Risks and open questions

The first risk is that the legal chain is longer than the marketing suggests. Most of the 4.26 million tokenized stock holders RWA.xyz counted on October 5, 2026 hold wrapper tokens issued outside the US; whether they would be treated as shareholders in a bankruptcy or a corporate action has not been tested in court. The SEC’s rights-parity condition applies only to venues using its exemption, and the Issuer Sponsored Token Coalition’s standards are a work in progress.

The second is liquidity mismatch. A token that transfers in seconds can create the expectation of exit in seconds, while the underlying loan or fund interest redeems in months. Tokenized credit at $8.0 billion is still small, and no platform has yet been through a full credit cycle with a large on-chain investor base; Maple and Centrifuge lived through 2022 defaults at much smaller scale. The 60 to 180 day redemption norm is not a bug, but a lending protocol that accepts those tokens as collateral at a thin haircut has effectively promised liquidity the fund cannot provide.

The third is regulatory durability. The innovation exemption expires five years after publication and was issued by an agency whose composition changed on October 1, 2026 with Commissioner Peirce’s departure. Chairman Atkins himself called it an interim measure that must be followed by rulemaking. A future Commission could narrow it, and the CLARITY Act’s market structure framework remains unfinished in the Senate as of October 2026. Issuers building on the exemption are building on a bridge.

The fourth is concentration and operational risk in the plumbing. Securitize acts as transfer agent for BUIDL, the ARK Venture Fund token and many others; its June 2026 listing adds public-company scrutiny but also means a single firm’s systems underpin a large share of institutional tokenized assets. Oracle failures, smart contract bugs and chain outages all sit between the investor and their asset in a way that a transfer agent’s database did not, and the custody questions covered in our wallets and self-custody guide apply to the token itself even when the underlying is safely held.

What to watch next

Glossary

Tokenization

Issuing a blockchain token that serves as the legal record of ownership of an asset held or administered off-chain.

Real-world asset (RWA)

Industry shorthand for any tokenized asset whose value comes from outside the blockchain: Treasuries, loans, stocks, funds, commodities, property.

Transfer agent

A registered firm that maintains the official register of who owns a security. In tokenized products it writes or reconciles that register to a blockchain.

Whitelist

The list of wallet addresses that have passed KYC and accreditation checks and are permitted to hold or receive a security token.

Tokenized Securities Venue (TSV)

The SEC’s term, from its September 17, 2026 order, for a venue that trades tokenized NMS stock through permissioned AMM liquidity pools under the five-year innovation exemption.

NMS stock

A stock listed on a US national securities exchange and covered by Regulation NMS, the rules governing the national market system.

Automated market maker (AMM)

A smart contract that prices trades from the ratio of assets in a liquidity pool rather than from an order book of bids and offers.

Synthetic token

A token that tracks an asset’s price without giving the holder any legal claim on the asset itself.

Issuer-sponsored token

A tokenized share recorded on the issuer’s official shareholder register, carrying voting and dividend rights.

Net asset value (NAV)

The per-unit value of a fund’s assets minus liabilities, struck by an administrator and, for tokenized funds, published on-chain.

Oracle

A service that delivers off-chain data such as NAV or prices to smart contracts.

DTC-eligible

A security that can be held in book-entry form at the Depository Trust Company, which custodies most US securities.

No-action letter

A letter from SEC staff stating they will not recommend enforcement if a firm proceeds with a described activity, used for DTCC’s tokenization pilot.

Feeder fund

A vehicle whose only asset is an interest in another fund, used here to tokenize access to a fund without changing the main fund’s structure.

Why it matters

For 12 years CCS has interviewed founders who promised that everything would be tokenized. What finally happened is narrower and more durable: the assets that were already standardized and liquid moved on-chain first because the gain was in settlement and collateral mobility, not in creating markets from nothing. Treasuries proved the model, stocks are now scaling on the back of a regulatory opening, and credit is growing where platforms can show real underwriting. The regulators have shifted from asking whether a token can be a security to writing rules for how a security lives on a ledger, and the depository that sits under the whole US market has committed to making its securities tokenizable.

What remains is the hard, dull work of making two formats of the same asset interchangeable without losing investor protections, and of being honest about which tokens carry rights and which carry only exposure. Read the structure, not the ticker. The technology stopped being the hard part some time ago.

Sources

1. SEC: SEC Issues “Innovation Exemption” to Facilitate the Trading of Tokenized NMS Stock and Request for Comment, September 17, 2026
2. SEC: Fact Sheet, Exemptive Order for Tokenized Securities Venues (Release 34-106402), September 17, 2026
3. SEC: Chairman Atkins, Statement on the Innovation Exemption: A Bridge Toward Durable Rulemaking, September 17, 2026
4. SEC: Commissioner Peirce, Slumber Number: Innovation Exemption Statement, September 17, 2026
5. SEC: SEC Proposes to Modernize Rules for Registered Transfer Agents, September 1, 2026
6. SEC: Proposal on Custody of Crypto Assets by Investment Advisers and Funds, October 1, 2026
7. ESMA: DLT Pilot Regime, accessed October 6, 2026
8. RWA.xyz: Tokenized asset market overview, October 6, 2026
9. RWA.xyz: Tokenized US Treasuries, October 6, 2026
10. RWA.xyz: Tokenized credit, October 6, 2026
11. RWA.xyz: Tokenized stocks, October 5, 2026
12. DTCC: Digital Assets and tokenization, accessed October 6, 2026
13. Figure: platform figures, accessed October 6, 2026
14. CoinDesk: Joint venture of OKX and NYSE parent ICE files for 24/7 tokenized U.S. stock trading, October 5, 2026
15. CoinDesk: More than 60 U.S. stocks including Nvidia and Tesla are headed onchain, October 5, 2026
16. CoinDesk: BlackRock offers a glimpse of how tokenization may change your investment portfolio, October 3, 2026
17. CoinDesk: Franklin Templeton brings its tokenized collateral service to Bybit, September 28, 2026
18. CoinDesk: Bullish, Alpaca, Apex Fintech and DriveWealth form coalition to push issuer-backed tokenized stocks, September 24, 2026
19. CoinDesk: Cathie Wood’s ARK teams with Securitize to tokenize venture fund, September 24, 2026
20. CoinDesk: DTCC aiming to make all 1.4 million securities in its custody digitally eligible, January 15, 2026
21. CoinDesk: DTCC picks Canton Network for tokenization, December 17, 2025
22. Crypto Coin Show Research: State of Tokenization, what 31 founder interviews say changed in real-world assets, 2025 to 2026, September 29, 2026
23. Crypto Coin Show: Johann Kerbrat, Robinhood, on Robinhood Chain, September 29, 2026

Disclosure: This guide is for education only and is not investment, legal or tax advice.