RWAs build mirrors where they need building blocks

Most RWAs remain isolated and underutilized instead of composable, DeFi-ready building blocks. It's time to change that.

Opinion by: Jakob Kronbichler, co-founder and CEO of Clearpool and Ozean

Real-world assets (RWAs) onchain aren‘t just a concept anymore — they’re gaining real traction.

Stablecoins are proof of that. Theyve become a dominant source of onchain volume, with annual transfers surpassing Visa and Mastercard by 7.7% last year. Tokenized US Treasurys are gaining interest from institutions hunting for yield.

Stablecoins represent more than just successful tokenization. They‘ve evolved into financial infrastructure. They’re not merely digitized dollars but programmable money that other applications build upon.

This platform dynamic separates winners from the many struggling RWA projects; most tokenized assets are designed as digital replicas when they should be architected as building blocks.

Tokenization does not equate to adoption

You can tokenize everything — that doesn‘t mean it’s useful.

Take a quick look at RWA dashboards, and youll see growing total value locked, more issuers and increased attention. But most of that value sits in several wallets with minimal integration into decentralized finance (DeFi) ecosystems.

This isnt liquidity; it is parked capital.

Early RWA models focused on wrapping assets for custody or settlement, not making them usable within the constraints of DeFi. Legal classification compounds the issue, constraining how and where assets can move.

Stablecoins succeeded because they solved infrastructure problems, not just representation ones. They enable instant settlement, eliminate pre-funding for cross-border flows and integrate seamlessly into automated systems. Most RWAs are still designed as digital certificates rather than functional components of a broader financial stack.

Thats starting to change. Newer designs are compliance-aware and DeFi-compatible. Adoption will follow when tokenized assets are built to integrate, not just to exist.

Integration isnt just a technical challenge.

Compliance is the bottleneck

The biggest chokepoint for RWA growth is legal. When a tokenized T-bill is classified as a security offchain, it remains a security onchain. That limits what protocols it can interact with and who can access it.

So far, the workaround has been to create gated DeFi: KYCd wallets, allowlists and permissioned access. But this approach kills composability and fragments liquidity, which are the very traits that make DeFi powerful in the first place.

While token wrappers may improve accessibility, they cant resolve the underlying regulatory status. Legal structuring has to come first.

The Senate‘s passage of the GENIUS Act marks a significant step forward, establishing a federal framework for stablecoins backed 1:1 by Treasurys. It’s the clearest sign yet that compliant, auditable digital assets are moving from the fringe to the core of institutional finance.

This shift will enable RWAs to evolve from static representations into usable, scalable financial instruments.

Liquidity hasnt caught up to the narrative

One of the strongest value propositions of RWAs is liquidity: 24/7 access, faster settlement and real-time transparency. However, most tokenized assets today trade like private placements, characterized by thin volume, wide spreads and limited secondary market activity.

Liquidity has lagged because regulated assets cant move freely across DeFi. Without interoperability, markets stay siloed.

Related: RWA backing: How do issuers ensure 1:1 peg with tokenized assets？

Stablecoins show that liquidity comes from composability. When currencies like the euro and Singapore dollar exist as programmable tokens, treasury operations transform from multi-step processes to instant cross-border transactions. Most tokenized assets miss out because theyre designed as endpoints rather than interoperable components.

The solution isn‘t more tokens. What’s needed is an infrastructure designed for both sides of the bridge with built-in compliance and transparency that meets institutional expectations.

Institutions need an upgrade

From an institutional perspective, most existing systems might be clunky, but theyre compliant. They work well enough. Without a step-change in efficiency, cost or compliance, migrating to blockchain is a hard sell. That changes when RWA infrastructure is purpose-built for institutional workflows.

When compliance isnt just bolted on but structurally integrated. When connections to liquidity, institutional-grade custody and reporting are seamless, they are not stitched together.

That‘s what it’ll take to make going onchain worthwhile.

DeFi needs assets it can use

RWAs were intended to bridge the gap between DeFi and traditional finance. But right now, many are stuck somewhere in between.

As institutions inch closer to onchain integration, DeFi protocols face the challenge of adapting their infrastructure to support assets with real-world constraints.

DeFis most-used assets are still native: stablecoins, Ether (ETH) and liquid staking tokens (LSTs). Tokenized RWAs remain largely siloed, unable to participate in lending markets, collateral pools or yield strategies.

Legal restrictions around asset classification and user access mean some protocols cant support them, at least not without significant modification.

That‘s starting to change. We’re seeing new primitives designed to make RWAs composable within controlled environments, bridging compliance and usability without compromising.

This evolution is critical: It will make RWAs functionally relevant inside DeFi, not just adjacent to it.

Every institution needs a tokenization strategy

The first wave of institutions is now choosing its tokenization strategy. The difference between winning and losing comes down to platform thinking: building infrastructure that others can build upon, not just wrapping assets in digital form.

Just as every company needed a mobile strategy in 2010 and a cloud strategy in 2015, institutions now need a plan for tokenized assets.

The companies that recognize this shift early will architect their systems to participate in and potentially control the emerging tokenized economy.

Those who wait will be stuck building on someone elses platform, with limited control, less flexibility and less upside.