What happened?
The market for tokenized real-world assets has seen a significant increase to $26.5 billion after growth of 70% in 2025. Tristero Research warns that this rapid growth may lead to an “on-chain subprime crisis” because of a phenomenon known as the “RWA Liquidity Paradox.” This notion is centered around the concept that tokenization could cause mismatches between slower physical assets and the fast-paced blockchain market, adding to systemic risk instead of reducing it.
Who does this affect?
This development impacts those involved in the tokenized asset market, including investors, technology firms, and financial institutions. The research indicates that tokenization doesn’t change the innate characteristics of assets like buildings, loans, and commodities. Therefore, these assets remain slow and illiquid despite their digital wrapping, which could potentially lead to mismatches in speed. This situation could amplify local problems into global shocks, similar to the 2008 financial crisis.
Why does this matter?
This issue is significant due to its market impact. As the sector grows, so do the risks associated with the potential mismatches in speeds between these tokenized assets and their native markets. It’s crucial to consider these risks because if unaddressed, they could lead to a subprime crisis similar to the one experienced in 2008. Despite this warning, industry projections remain positive, with bold forecasts predicting continued market growth, even suggesting that the sector could access a $400 trillion traditional finance market.