The financial landscape is changing significantly as digital assets make progress into different sectors of the economy. They are even being integrated into traditional financial markets, such as real estate.

Traditional assets worth hundreds of trillions of dollars remain locked in systems that date back centuries. While innovative blockchain technology promises to unlock new levels of efficiency and accessibility, practitioners are still trying to iron out the details: regulations, best practices, and institutional adoption.

At the DigiAssets 2024 conference, industry leaders gathered to explore the intersection of traditional finance and digital assets. Here, we’ll explore the multiple sessions that explored how the movement to bring real-world assets on-chain is growing.

The Case for Digital Transformation

According to a recent report by Deloitte, the tokenized real estate market is projected to reach $4 trillion by 2035, up from approximately $300 billion in 2024. This represents a staggering 1,200% growth potential over the next decade.

Meanwhile, other research indicates that real estate is expected to become the largest type of tokenized asset by 2030, capturing nearly half of the overall tokenized asset market.

These numbers reflect a broader shift. As one expert at DigiAssets 2024 explained, while the traditional asset universe represents roughly $300 trillion globally, the tokenized market remains relatively small at around $1 trillion.

The opportunity lies in building bridges between these two worlds rather than replacing one with the other entirely.

Real Estate Tokenization: From Theory to Practice with Realproton

One of the most compelling examples presented at DigiAssets 2024 came from Realproton, which demonstrated live tokenization of $84.175 million worth of real estate assets in under three minutes. The company's journey illustrates both the promise and challenges of bringing real-world assets on-chain.

Navigating the Maze of Regulations

Realproton's founder and CEO, Dr. Jay Patel, shared how his team spent seven years navigating regulatory complexities before achieving their first successful tokenization.

"We hired 16 different law firms in about 10 different jurisdictions and spent over $1.2 million trying to get to the bottom of regulatory requirements," said Patel. "When it comes to token trading, going from primary into the secondary market across different jurisdictions and blockchains, we realized it's a maze with so many nuances involved."

The company focuses on acquiring "distressed assets”—properties available at significant discounts due to defaults or financial stress. Realproton targets assets performing between 8% to 20% yields, with an average of 13-14%.

This strategy leverages the fact that nearly $3.5-4 trillion worth of CMBS (Commercial Mortgage-Backed Securities) notes are coming due, creating opportunities to acquire quality assets at substantial discounts.

Fractional Ownership and Market Access

The tokenization process enables fractional ownership, allowing retail investors to access previously exclusive investment opportunities.

"We're providing fractional ownership while focusing on security and compliance," said Harnish Gajjar, Realproton's Chief Operating Officer of Realproton. "All these tokens are asset-backed, and we maintain strong regulatory adherence. This injection of liquidity addresses the primary challenge in real estate by tokenizing assets that were previously illiquid."

This approach mirrors successful implementations elsewhere. For instance, Northern Trust has operated a bond fractionalization program in Singapore for five years, where traditional bonds are held in custody and then tokenized for retail access at lower face values.

Beyond Real Estate: Private Equity and Alternative Assets

Northern Trust's experience illustrates how established financial institutions are integrating blockchain technology with existing systems. Arijit Das, the bank's SVP for Digital Asset Innovation Technology, emphasized the distinction between blockchain applications for information sharing versus cryptocurrency payments.

As Das explained: "Our approach has been to build a software layer that maps events happening on the digital side—for example, a token moving from wallet A to wallet B—to equivalent language on the traditional side that custody systems can understand, such as translating into a Swift MT54X message."

The bank launched its Matrix Zenith platform after years of development, creating a software layer that maps digital asset events to traditional custody system language.

Private Equity Tokenization Success Stories

The private equity sector has seen other notable tokenization advances.

For example, according to a report by MarketsMedia, Hamilton Lane successfully tokenized its Luxembourg-based $3.8 billion Global Private Assets Fund, while Citi completed a proof of concept with Wellington Management and WisdomTree on Avalanche's institutional blockchain network.

These initiatives address private equity's traditional barriers, such as high minimum investments, long lock-up periods, and limited liquidity. According to an industry analysis by the Chartered Alternative Investment Analyst Association, annualized returns for the period of 2000 to 2023 reached 11.0%, which "is impressive compared to the 6.2% annualized return for the Public Stock Benchmark.” Furthermore, "the resulting 4.8% annualized return difference exceeds the 3% annual premium or excess return generally associated with return objectives for private equity.”

Institutional Barriers and Drivers of Tokenization

Despite technological capabilities, institutional adoption faces headwinds.

Regulatory Uncertainty

A survey by SBIDAH (PDF) found that 23.5% of institutional investors cite a lack of institutional-grade infrastructure as the primary barrier to digital asset investment. However, this was followed by regulatory ambiguity at 13.7%.

Eric Pollackov, Global Head of ETF Capital Markets at Invesco, highlighted the challenge of regulatory risk during DigiAssets 2024:

"Regulatory risk is almost the whole enchilada. That's what's keeping institutions out. The clear message many trust companies and mutual funds receive is that engaging with digital assets creates a big target on their backs from regulators."

This is beginning to change, as major countries have been pushing out clearer guidance and regulations in recent years.

Barrier: The Infrastructure Gap

In a 2024 report entitled "The Financial Stability Implications of Tokenization” (PDF), the Financial Stability Board notes that tokenization projects have struggled to scale due to several factors, including:

• Unclear demand from investors
• A lack of interoperability between decentralized and traditional financial infrastructure
• The unavailability of settlement assets
• Differences in legal frameworks across jurisdictions

These issues are common. Northern Trust's Das pointed to the complexity of integrating new technology with legacy systems:

"Some of these traditional systems are COBOL-based, running for 20-plus years. Some don't even have source code anymore. Tinkering with back-office and middle-office systems becomes extremely expensive, but you can't ignore them if you want to harvest the true value of blockchain technology."

Barrier: Smart Contract Vulnerabilities

While automation through smart contracts offers efficiency gains, their vulnerabilities make them a barrier. Experts at DigiAssets 2024 emphasized the importance of understanding their limitations:

"There are two things about smart contracts: they're not smart, and they're not contracts," said Das. "Just because something is in a smart contract doesn't mean it will work as intended. Unless you can audit the code or have other verification means, you can never be completely sure."

The Financial Stability Board identifies several vulnerabilities in tokenization, including:

• Liquidity and maturity mismatches between tokens and underlying assets
• Operational fragilities from new technology interactions with legacy systems
• Smart contract security risks that could lead to asset loss or exploitation
• Interconnectedness risks as tokenized assets integrate with broader financial systems

Overcoming these vulnerabilities will require further regulatory guidance, as well as the establishment of best practices for tokenization among institutions. As the leaders at DigiAssets 2024 made clear, these steps are already underway.

Driver: Choosing Integration Over Replacement

The consensus among DigiAssets 2024 participants centered on integration rather than wholesale replacement of traditional finance.

Stuart MacDonald, Managing Partner at Bride Valley Partners, who moderated a panel discussion, provided some insight:

"The space is still nascent," he said. "Market function isn't entirely satisfactory yet, and structures aren't perfect at either the infrastructure level or the manager level."

Success stories demonstrate that gradual integration works. Northern Trust's private equity application allows real-time auditing through blockchain nodes by firms. Importantly, it does so while maintaining compatibility with existing legal and operational frameworks.

Driver: Using Private Blockchains as Stepping Stones

Similarly, institutions are pursuing private, permissioned blockchain networks as intermediary steps toward broader adoption. These systems offer controlled environments where participants can be identified and managed, smart contracts can be governed through established change management processes, and transaction recall capabilities exist for error correction.

As Das explained, "Private blockchains don't eliminate smart contract risks, but they make them more manageable. You can control what contracts are deployed and maintain consistent audit and legal oversight. It's a natural progression from isolated systems to shared ledgers among trusted parties, eventually reaching public networks."

Driver: Tokenization’s Momentum Isn’t Slowing Down

Finally, the tokenization market shows strong growth momentum. RedStone Finance reports that tokenized real-world assets (excluding stablecoins) grew from $5 billion in 2022 to over $24 billion by June 2025—a 380% increase, making it crypto's second-fastest growing sector after stablecoins.

Private credit has emerged as the largest tokenized segment at $14 billion as of June 2025, demonstrating institutional appetite for blockchain-native credit markets that maintain traditional underwriting standards while offering high-yield opportunities.

Looking Ahead: Market Maturation and Scale

The journey from traditional finance to tokenized assets requires patience, regulatory clarity, and continued infrastructure development. However, with major institutions like BlackRock, JPMorgan, and Franklin Templeton moving beyond experimentation to production-scale deployment, the foundation for transforming how we store, transfer, and invest in assets worldwide is solidifying.

As Federico Brokate, Head of U.S. Business at 21Shares, noted during DigiAssets 2024:

"We're in the very first inning when it comes to client adoption. Despite the success of exchange-traded products so far, we need to overcome hurdles around due diligence processes and education with advisors and institutional investors. Until we address misconceptions about what Bitcoin, Ethereum, and blockchain technology can actually do, we'll continue seeing gradual rather than massive adoption."

To learn more, don't miss the next Digital Assets US conference. It's happening from October 20-21st, 2025 at the JW Marriott Miami.