When ETFs debuted in the early 1990s, they were tradable from day one, but early volumes were modest and secondary-market liquidity deepened only as the investor base broadened and market-maker economics became viable. The structural value of ETFs such as lower-cost access to diversified exposure was real from day one. But the liquid market around them took time to mature.

Tokenized RWAs are at a comparable stage. The on-chain infrastructure exists and the market is growing, with tokenized RWAs more than tripled since early 2025, reaching $31.9 billion by early June 2026. Secondary market depth, for most asset categories, is still developing. This article looks at what the data shows, where liquidity is working, and what issuers can do to build it. 

What the Data Shows About RWA Secondary Market Activity

According to RWA.xyz, US Treasuries are the largest tokenized asset category at approximately $15 billion, followed by private credit at around $12 billion. The total tokenized RWA market (excluding stablecoins) reached $19.3 billion by the end of Q1 2026, more than tripling since early 2025, per the CoinGecko 2026 RWA Report. These figures reflect market capitalisation - how much has been issued and is held on-chain - not how much is being actively traded.

Trading activity that has materialised is concentrated in specific categories:

• Tokenized gold spot trading hit $90.7 billion in Q1 2026, surpassing the $84.6 billion traded for all of 2025. Tokenized stocks reached $15.1 billion in spot trading volume in Q1 2026. Source: CoinGecko 2026 RWA Report
• Private credit and structured products, by contrast, show more limited secondary trading activity relative to their on-chain size, with most activity concentrated in subscriptions and redemptions rather than secondary transfers — a pattern consistent with the arXiv study (2025) finding that most RWA tokens exhibit long holding periods and low secondary trading volumes.

This picture is consistent with findings from the OECD's report on tokenisation and MAS Project Guardian's Bridging the Adoption Gap: the absence of a functioning secondary market for tokenized assets is a structural observation, driven by ecosystem fragmentation, limited liquidity provision, and the absence of integrated payment rails. These are the conditions the market is actively working to address, as Sections 3 and 4 cover.

Why Secondary Trading Does Not Automatically Follow Issuance

A common expectation among issuers is that tokenization, by making an asset digitally transferable, will naturally generate secondary market activity. In practice, several structural factors mean that issuance and liquidity are separate problems requiring separate solutions.

What issuers often expect vs. what tokenization actually delivers‍

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The structural reasons behind this gap are worth understanding in detail.

• Compliance architecture restricts transfers by design. Wallet allowlisting and investor eligibility gating are required for regulated products. BUIDL was built as a permissioned system on public blockchains, with prospective holders required to clear a Securitize-managed allowlist, and on-chain transactions carrying no legal effect until a transfer agent reconciles them with the off-chain record. This is appropriate for a regulated institutional product. It also means the eligible pool of secondary buyers is limited by definition.
• Market makers require price certainty and regulatory clarity. Market makers will typically only participate when they can price an asset continuously and hedge their positions. For assets with quarterly NAV updates, opaque valuations, or unclear capital treatment rules, that condition is not met. The Baker McKenzie/Deutsche Bank tokenization whitepaper (2024) noted that regulatory clarity on capital treatment, settlement rules, and reporting requirements is a prerequisite for market maker participation at scale.
• Platform fragmentation limits the addressable buyer pool. The OECD 2025 report on tokenisation notes that most tokenized assets cannot be transferred or traded outside the platform on which they were created. This reduces the effective number of potential secondary buyers for any given offering.
• Most infrastructure was built for primary issuance first. The arXiv paper "Tokenize Everything, But Can You Sell It?" (2025) identifies this directly: most tokenization platforms were designed for issuance, not secondary trading, and secondary market capability has largely been added after the fact. This is one reason why platform selection matters early in the process. InvestaX, for example, holds both a CMS and RMO licence from MAS, covering primary issuance and secondary trading within a single regulated framework. 

Understanding these structural factors helps issuers plan for liquidity specifically, rather than expect it to follow issuance automatically. Sections 3 and 4 cover where liquidity is working today and what issuers can do to build it. 

Where Liquidity Is Actually Working

Secondary trading in tokenized RWAs is active in categories where price discovery is continuous and market making is economically viable.

• Tokenized commodities and money market funds have the most active secondary markets. Gold tokens have a continuously observable spot price, which makes on-chain pricing straightforward and market making viable. According to CoinGecko's 2026 RWA Report, tokenized commodities rose 289% to $5.5 billion in the fifteen months to Q1 2026, driven by gold-backed tokens XAUT and PAXG. Tokenized MMFs benefit from stable, predictable NAVs with narrow bid-ask spreads, which Phillip Capital's program under MAS Project Guardian demonstrated is sufficient for continuous market maker participation.
• Products designed for composability from launch may show stronger secondary activity. When tokens are built for cross-chain transferability across multiple supported blockchains, they reach a broader pool of potential buyers and integrate with a wider range of trading infrastructure, supporting more active secondary trading than single-venue issuance where the eligible buyer pool is limited to one platform.
• Collateral integration has emerged as an important post-issuance utility layer for institutional tokenized assets, alongside exchange trading. BlackRock's BUIDL accepted as yield-bearing trading collateral by OKX (April 2026), DBS Bank's integration of Franklin Templeton's tokenized MMF as loan collateral, and Binance's acceptance of USYC and cUSDO as off-exchange collateral all represent secondary market utility that does not require exchange trading.

The common thread among successful projects appears to be a focus on assets with observable pricing, products designed for transferability from day one, and utility mechanisms that drive organic demand beyond passive holding.

What Issuers Can Do: Matching Mechanism to Asset

Before getting into mechanics, it helps to understand what institutional investors actually need from secondary markets. According to the MAS Project Guardian Bridging the Adoption Gap report, institutional investors may require competitive spreads from multiple market makers, transparent price discovery, and the ability to execute large transactions without significant price impact. Many institutional mandates also set explicit liquidity thresholds or caps on illiquid allocations, which means tokenized assets without a credible secondary market may not make it past initial screening. For issuers targeting this audience, having a secondary venue available is the starting point.Several mechanisms are available, and the right one depends on the asset type, investor base, and how the product is structured from the outset. 

For assets with observable continuous pricing (MMFs, Treasuries, tokenized commodities):

Engaging a market maker from day one and defining bid-ask spread requirements can be a direct path to active secondary trading. Collateral integration with lending platforms and prime brokers creates a secondary utility layer that generates organic demand. RedStone's March 2026 report counted over $620 million in RWA deposits on Morpho and $423.5 million on Aave Horizon, both of which accept tokenized treasury products as collateral. 

For private credit and structured products:

From our observations, exchange trading is not the realistic near-term secondary mechanism for most private credit products. More practical options are programmatic redemption windows built into the smart contract at issuance, giving investors a defined exit without requiring secondary market buyers, and OTC facilitation between verified investors on a licensed platform. Where the asset has a defined cash flow profile, collateral-based liquidity may also be available.

For all asset types:

Distribution breadth before launch can impact secondary market capacity. From InvestaX's direct experience with programs on its MAS-licensed tokenization platform, the issuers who see the most secondary activity are consistently those who build their ecosystem of stakeholders base before launch. Smart contract design at issuance determines what is mechanically possible later - transfer conditions, lock-up periods, eligibility controls, and redemption windows should be defined at structuring, not added as requirements after launch. 

Where the Market Is Heading

The infrastructure for broader secondary trading is being built at the systemic level. DTCC's tokenization service is scheduled for a July 2026 limited production launch and October 2026 full rollout, with over 50 institutional participants including BlackRock, Goldman Sachs, and JPMorgan. The SEC approved Nasdaq and NYSE rule changes in Q1 2026 permitting tokenized securities trading, with first trades expected by Q3 2026. For institutional-grade tokenized assets, these developments may materially expand secondary trading capacity through the second half of 2026 and into 2027.

For most issuers today, a realistic liquidity sequence is: primary issuance with broad investor distribution, post-issuance collateral utility as the first active liquidity layer, programmatic redemption or OTC as the secondary exit mechanism, and exchange trading as a longer-term development once investor base depth and market maker participation increase.

It is also worth noting that tokenization's value to issuers extends well beyond secondary trading depth. The potential for faster primary distribution, lower minimum investment thresholds, automated post-issuance servicing, and cross-border investor access are operational improvements that are available today. Evaluating tokenization against this full range of benefits gives a more complete picture of what the technology provides at this stage of market development.

FAQ

Why do most tokenized RWAs have low secondary market trading volume? Most tokenized RWAs are structured for institutional holding with compliance restrictions, including wallet allowlisting and investor eligibility gating, that limit the eligible pool of secondary buyers. Additionally, most tokenization platforms were built for primary issuance first. Secondary market infrastructure is still being developed, and market maker participation requires price certainty and regulatory clarity that is not yet in place for most tokenized asset categories. Source: arXiv, "Tokenize Everything, But Can You Sell It?" (2025)

Does tokenization automatically create liquidity for real-world assets? Tokenization can enable secondary trading by providing the technical infrastructure for on-chain transfers. It does not automatically create buyer demand, market maker participation, or price discovery, which are the factors that determine whether secondary trading actually occurs. Issuers who design for liquidity from the structuring stage, including investor distribution strategy and appropriate transfer mechanics, are better positioned for secondary market activity than those who address it after launch.

What is the most liquid category of tokenized RWA today? Tokenized commodities, particularly gold, and tokenized money market funds have the most active secondary trading. Tokenized gold spot trading reached $90.7 billion in Q1 2026, per CoinGecko. The primary reasons are continuous price discovery from underlying markets and stable NAV profiles that make market making economically viable. Nasdaq

How can issuers improve secondary market liquidity for tokenized assets? The most practical steps are: engaging market makers at launch for products with continuous pricing, building investor distribution broadly before issuance rather than after, designing programmatic redemption windows into the smart contract at structuring, and pursuing collateral integration with lending platforms where the asset profile supports it. For most private credit and structured products today, OTC facilitation between verified investors is the realistic secondary mechanism rather than exchange trading.

What is the difference between primary issuance liquidity and secondary market liquidity in tokenized assets? Primary issuance liquidity refers to the ability to raise capital through the initial offering. Secondary market liquidity refers to the ability of investors to buy or sell the token after issuance. Most tokenized RWA programs today have functional primary issuance infrastructure. Secondary market depth, the ability to trade at scale with tight spreads, is still limited for most asset categories outside tokenized commodities and money market funds.

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