In late May we looked at a $32 billion on-chain real-world asset market and asked what institutions were actually doing in it. The number has since moved to roughly $33.5 billion excluding stablecoins, about four times where it stood in early 2025, after a first quarter that grew around 30 percent and a record of near $28.9 billion in May. The regulatory scaffolding arrived alongside it: an SEC statement that settled a long-open legal question, regulated trading and custody venues opening at Nasdaq and FINRA, and the first tokenization company IPO.
By any conventional reading this is a sector that has succeeded. The more useful question is what, specifically, has succeeded — and there the picture is narrower than the headline suggests.
The Composition Problem
Tokenized US Treasuries and money market funds are the largest category, in the range of $13 to $15 billion, with BlackRock's BUIDL the most visible single fund at roughly $2.5 to $2.9 billion. Private credit is the next largest. Commodities, real estate and equities make up the remainder.
Beyond that, the figures diverge sharply depending on who is counting. Private credit estimates range from about $8 billion to $19 billion depending on methodology, and at least one analysis concludes that roughly 80 percent of on-chain RWA value sits in a single asset class. That spread is not a rounding difference. It reflects genuine disagreement about what counts as tokenized: whether a loan recorded on a chain for operational purposes belongs in the same total as a fund interest distributed as a transferable token an investor actually holds.
We drew that distinction in July when examining who is actually on-chain in private credit, and it is worth restating, because a market cannot be assessed for concentration risk when the denominators are contested. The measurement problem is itself evidence of the maturity gap.
Why Treasuries Went First
The dominance of Treasuries is not an accident, and it is not primarily a distribution story. Treasuries tokenized first because they are the asset class where tokenization has the least work to do.
A Treasury bill has no meaningful default question, no recovery process to model, no custody ambiguity about the underlying instrument, and a price that is observable continuously from public markets. The record-keeping burden is close to trivial: there is one issuer, the terms are standardised, and no one disputes what happened. Wrapping that in a token adds programmable settlement and around-the-clock transfer to an instrument that was already among the most legible in global finance.
That is a genuine improvement, and the growth is real. But it means the sector's headline figure is dominated by the case that tests the least. The hard properties of a tokenized asset — whether the record survives a default, whether custody is provable, whether the audit trail holds up when parties disagree — are barely exercised by a portfolio of short-dated government paper.
The Categories That Haven't Scaled Are the Ones That Need It
Look at what has not grown proportionally. Real estate, private credit at the genuinely tokenized end, commodities with physical delivery obligations, and private equity interests all share a set of characteristics: valuation is periodic rather than continuous, default and recovery are live possibilities, custody of the underlying involves a chain of intermediaries, and the record of who owned what and who was paid may be examined years later in a dispute.
These are exactly the assets where an independent, tamper-evident record is worth paying for, and they are the ones where tokenized volume remains thin. The obstacle is not investor appetite, which is demonstrable. It is that tokenizing them properly requires solving problems that tokenizing a Treasury bill does not: what the token means when the borrower stops paying, who holds the underlying and how that is proved, and whether the ownership record can be trusted by someone who does not trust the issuer.
A market that has quadrupled while remaining concentrated in its easiest asset class has not yet demonstrated the thing it claims to demonstrate.
Concentration Is Also a Rails Problem
There is a second concentration worth noting, beneath the asset mix. A significant share of tokenized value sits in a small number of funds, issued by a small number of managers, deployed across a small number of networks, with cross-chain representations moving between them.
We spent the middle of July on why that last property matters: bridge exploits in 2026, why wrapped-asset representations concentrate failure, and why native settlement is the structural fix. For a Treasury fund, a bridge failure is a serious trading loss. For a private credit interest or a real estate title, a bridge failure corrupts the ownership record itself — which is the entire product. Extending tokenization into the harder asset classes on the current architecture would mean building the least forgiving instruments on the least robust part of the stack.
What Genuine Diversification Requires
Broadening the market beyond government paper needs three things that the Treasury boom did not. Custody has to be provable rather than asserted, which is the proof-of-reserves argument applied to assets that are harder to verify than a cash balance. Default and recovery have to be legible on-chain, so that the token's meaning under stress is defined before stress arrives. And the settlement record has to be independent of the issuer and durable enough to be examined long after the position closes.
None of these are distribution problems, which is where most of the sector's engineering effort has gone. They are settlement and record-keeping problems.
Where Mintlayer Fits
Mintlayer is a Bitcoin Layer 2 built for asset issuance and settlement. Assets issued on it inherit Bitcoin's UTXO structure, so supply and ownership are explicit at the protocol level rather than held in mutable contract state, and settlement anchors to Bitcoin's Proof-of-Work chain. Bridges stay out of the trust path because the asset is native to the layer it settles on. I1 applies that structure to regulated funds holding income-producing real-world assets, distributing cash flow directly to token holders, and Mintlayer Web Services provides the underlying issuance infrastructure.
The next $33 billion will be harder to earn than the last. It has to come from assets where the record is the product, and those assets will only move on-chain at scale when the record can be trusted without trusting the operator.
This article is for informational purposes only and does not constitute investment advice.
Mintlayer's I1 holds income-producing real-world assets and distributes the cash flow to token holders, settled on Bitcoin-native infrastructure. Learn more →
