When the internet went mainstream in the 1990s, the first decade was spent getting businesses online. The next years were spent figuring out what people could actually do once they were there. Large-scale e-commerce, social media, and cloud computing did not emerge the moment the first website went live. They emerged once the infrastructure was in place and developers, businesses, and consumers could start building on top of it.

RWA tokenization is following a comparable arc. The first phase, roughly 2018 through 2025, was about getting assets on-chain: building custody infrastructure, adapting transfer agency workflows, navigating regulatory frameworks, and issuing the first generation of tokenized funds at meaningful scale. Tokenized RWAs grew 256.7% over fifteen months, with on-chain value crossing $32 billion in early May 2026. Tokenized U.S. Treasuries alone now stand at roughly $15 billion per RWA.xyz.

What is being built now is the use case layer: what institutions can actually do with tokenized assets once they hold them. This is what we call the next phase in RWA tokenization, and it is developing across three interconnected fronts simultaneously: collateral integration, secondary market trading, and cross-border settlement.

1. Collateral: The First Use Case to Go Operational

Consider how government money market funds work in traditional institutional finance. A prime brokerage client posts cash or T-bills as margin. That capital sits idle while it serves its security function. The client earns nothing on it and the prime broker carries it as a liability. The arrangement functions, but it is operationally inefficient.

Tokenized money market funds are beginning to change this specific dynamic. In April 2026, BlackRock, Standard Chartered, and OKX announced a joint framework allowing BlackRock's BUIDL fund to be posted as yield-bearing collateral for trading on OKX, with Standard Chartered acting as regulated off-exchange custodian. Institutions can hold BUIDL in custody at Standard Chartered while trading on OKX, with U.S. Treasury yield accruing throughout. Margin capital that previously sat idle now works while it waits.

Across the tokenization industry, a pattern has been building:

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What ties these cases together is the convergence of three conditions: regulated custody for tokenized securities, clear legal rights for token holders, and operational integration with existing trading and lending platforms. The asset is no longer just a yield product but a multi-purpose holding that can simultaneously earn yield, support margin, and serve as settlement collateral. 

Beyond regulated institutional channels, tokenized RWAs have also found a utility layer within DeFi protocols. Lending platforms like Aave and MakerDAO allow users to deposit tokenized treasury or credit positions as collateral to borrow stablecoins. Protocols like Centrifuge and Maple Finance facilitate on-chain lending against tokenized receivables and private credit. These applications may be less operationally standardized than the institutional examples above, but they signal the direction of composability: tokenized RWAs becoming programmable inputs across a wider range of financial strategies.  

2. Trading Infrastructure: What Is Being Built, What Is Still Missing

A 2024 study on arXiv found that most RWA tokens exhibit low trading volumes and long holding periods. And the market has taken note. Over the past six months, some of the largest financial market infrastructure providers, including DTCC, Nasdaq, and NYSE, have announced concrete programs to build the secondary market layer that tokenized assets currently lack. 

What trading means for tokenized assets

In conventional markets, trading means buying or selling a security on an exchange, with post-trade settlement handled by clearing infrastructure like DTCC, typically settling in T+1 or T+2. For tokenized assets, the mechanics work similarly but the settlement leg moves on a blockchain, enabling near-instant settlement, 24/7 availability, and peer-to-peer transfer without a traditional clearing intermediary. The challenge is building enough market depth for the efficiency gain to matter in practice.

What is coming online?

• DTCC tokenization service (announced May 4, 2026): Limited production trades scheduled for July 2026, full service launch October 2026. Over 50 participating institutions including BlackRock, Goldman Sachs, JPMorgan, Circle, Ondo, and Ripple Prime. Initial asset scope: Russell 1000 constituents, major ETF indices, and U.S. Treasuries. Built on DTCC's ComposerX platform under a December 2025 SEC no-action letter.
• Nasdaq and NYSE rule changes: SEC approved Nasdaq's rule change on March 18, 2026, and NYSE's on April 17, 2026, both permitting tokenized securities to be listed and traded. First tokenized Nasdaq trades are expected by Q3 2026 once DTC system updates are complete.
• Tokenized ETF shares: In January 2026, F/m Investments filed the first SEC exemptive application to record ownership of its TBIL ETF on a permissioned blockchain. The application seeks to add an on-chain recordkeeping layer to an existing registered ETF, preserving identical economic, governance, and voting rights.

The trading activity that has materialized so far is concentrated in a few specific categories. Tokenized gold spot trading reached a record $90.7B in Q1 2026, surpassing the full-year 2025 total of $84.6B. Tokenized stocks grew from roughly $280 million in mid-2025 to $1.46B by May 2026, and RWA perpetuals hit $524.79B in Q1 2026 trading volume. These are real numbers, but they remain concentrated in tokenized commodities, government debt, and crypto-native venues. Trading depth in tokenized private credit, real estate, and alternative funds is still thin.

Liquidity fragmentation is an operational challenge that analysts have flagged specifically: unlike a central order book, tokenized stocks may trade across various decentralised exchanges on multiple blockchains, which can lead to price slippage and inefficient market pricing. The DTCC's integration model, which embeds tokenized representations into existing clearing infrastructure rather than creating parallel markets, is partly designed to address this. Whether it succeeds depends on how many participants onboard and how quickly the eligible asset scope expands beyond the initial highly liquid categories.

3. Cross-Border Settlement and Composability: Where Tokenization's Structural Advantage Is Clearest

Cross-border settlement is where the structural advantage of tokenization over conventional instruments is most concretely demonstrated by completed transactions.

On May 6, 2026, Ondo Finance, JPMorgan's Kinexys, Mastercard, and Ripple completed what participants described as the first near real-time cross-border, cross-bank redemption of a tokenized U.S. Treasury fund. Ripple redeemed a portion of its holdings in Ondo's OUSG fund on the XRP Ledger; the asset leg settled in under five seconds. Mastercard's Multi-Token Network transmitted instructions through Kinexys, which delivered U.S. dollar proceeds to Ripple's Singapore bank account through JPMorgan's correspondent banking network. The full cross-border transaction ran outside traditional banking windows, in a single integrated flow. The equivalent through correspondent banking typically takes one to three business days.

The transaction demonstrated how on‑chain asset settlement can deliver near‑instant settlement when combined with traditional fiat infrastructure. Ondo Finance President Ian De Bode noted it was "the first time tokenized U.S. Treasuries have settled across borders and banks in near real time and outside traditional banking windows."

Composability with other on-chain systems is the fourth dimension of this. In February 2026, BUIDL became tradable via UniswapX, expanding its use in DeFi collateral workflows. In March 2026, BUIDL integrated with Chronicle's on-chain asset proof verification layer, enabling real-time, tamper-resistant certification of underlying holdings sourced directly from custodian BNY Mellon. Spark Liquidity Layer now programmatically allocates $1.5B across tokenized fund products including BUIDL, Anemoy, and Superstate, rebalancing automatically based on yield conditions.

For institutional allocators, this next phase begins to look less like an upgrade to existing infrastructure and more like a different model for how capital moves. A tokenized fund held in Singapore can serve as collateral for a trading position in Hong Kong, earn yield overnight, settle a cross-border redemption in seconds, and be reallocated programmatically based on a smart contract instruction. None of that requires a phone call, a wire transfer, or a two-day settlement window.

However, there are constraints that institutional allocators should take seriously. More portfolio complexity means more exposure to liquidity mismatches, particularly in tokenized private credit or real estate that may not redeem quickly. Wallet-native ownership shifts some custody responsibility from intermediaries to the asset holder. Regulatory clarity is still uneven: the CLARITY Act in the U.S. is in active legislative process, MiCA implementation in the EU is ongoing, and operational guidance from MAS and Hong Kong's regulators continues to develop. Cross-border distribution requires navigating multiple regulatory frameworks simultaneously, and the legal characterisation of tokenized fund interests does not always travel neatly across jurisdictions.

Where the Market Goes From Here

The next phase of RWA tokenization is a build-out across collateral, trading, and settlement infrastructure that is happening in parallel, at different speeds, in different markets. Collateral integration is live and scaling. Trading infrastructure is arriving on announced timelines through the second half of 2026 and into 2027. The Ondo / JPMorgan / Mastercard / Ripple transaction in May 2026 demonstrated that cross-border tokenized fund settlement is operationally viable outside traditional banking windows, a threshold that prior to that transaction had not been crossed at institutional scale.

The questions worth tracking from here are which tokenized asset categories develop genuine secondary market depth beyond government debt and commodities, how quickly the DTCC and exchange-integrated trading infrastructure translates announced capacity into real volume, and how regulatory convergence across jurisdictions shapes which tokenized fund structures can distribute globally without structural friction.

As utility expands beyond issuance, the gap between tokenized assets and core financial infrastructure continues to narrow. The institutions building now are building for a market structure in which tokenization is not a separate category but a standard format across a meaningful share of capital markets activity.

Frequently Asked Questions

How are tokenized assets used as collateral? 

Tokenized money market funds and treasuries are being accepted as yield-bearing collateral in institutional trading and lending. Live examples include the BlackRock BUIDL / OKX / Standard Chartered off-exchange margin collateral framework (April 2026), DBS Bank's integration of Franklin Templeton's tokenized MMF as loan collateral (September 2025), and Binance's support for USYC and cUSDO as institutional off-exchange collateral.

When will regulated tokenized securities trading go live in the US? 

DTCC plans limited production trades in July 2026 and a full service launch in October 2026, covering Russell 1000 stocks, major ETFs, and U.S. Treasuries. The SEC approved related rule changes from Nasdaq in March 2026 and NYSE in April 2026. First tokenized Nasdaq trades are expected by end of Q3 2026.

Is tokenized asset trading widely supported today? 

Trading is live in specific categories, such as tokenized government debt and gold, but secondary market depth in many tokenized asset classes remains limited. Secondary trading is already facilitated on specialized platforms; for example, InvestaX’s MAS-licensed tokenization platform operates an RMO‑licensed exchange where tokenized securities can be traded. At the infrastructure level, major market providers (DTCC, Nasdaq, NYSE) have announced programs to build trading systems for tokenized securities, with operational delivery targeted in 2026–2027. 

What does cross-border settlement mean for tokenized funds? 

Tokenized funds have the potential to settle cross-border in near real time using blockchain infrastructure combined with traditional banking rails, as demonstrated by the Ondo / JPMorgan / Mastercard / Ripple pilot in May 2026. This offers a significant advantage over conventional cross-border settlement, which typically takes one to three business days through correspondent banking. For asset managers distributing funds across multiple jurisdictions, this has the potential to meaningfully reduce operational friction.

Final Note

Real-world asset tokenization is steadily becoming part of mainstream financial infrastructure. Its value lies in applying digital tools to established regulatory frameworks, creating the potential for more consistent servicing, greater transparency, and clearer operational workflows. For issuers or managers exploring digital issuance, working with a regulated tokenization provider like InvestaX offers a more reliable path to deployment and ongoing administration.

If you are considering tokenizing assets, you can contact InvestaX to explore regulated pathways and implementation options.