The promise of asset tokenization-unlocking liquidity, fractionalizing ownership, and enabling 24/7 global access-has never been clearer. Yet, the path to institutional-scale adoption is not without its hurdles: regulatory uncertainty, lack of standardization, and distribution challenges remain the most significant barriers to progress.

Despite these challenges, leading financial institutions such as Goldman Sachs, BlackRock, and JPMorgan are actively building, signaling their conviction in the future of tokenized markets. 

The State of Play: Barriers to Institutional Adoption

1. Regulatory Uncertainty

Regulations for digital assets and tokenized securities vary widely across jurisdictions, creating a patchwork that complicates cross-border issuance, trading, and settlement. For example, while Singapore’s Monetary Authority of Singapore has taken a proactive stance through initiatives like Project Guardian, many other markets lack clear frameworks or alignment, increasing legal and operational risks for asset managers and investors. 

For more information on this topic, please watch our webinar recording about “Navigating Regulations and Legalities in Real-World Assets (RWAs)” below. 

Good sign: Regulatory efforts and industry initiatives are underway.

Despite these barriers, the industry is moving forward. Regulators and market leaders are increasingly collaborating to develop sandboxes, pilot projects, and working groups focused on digital asset standards and regulatory clarity. Notable examples include:

• MAS Project Guardian: Singapore is at the forefront, with the Monetary Authority of Singapore (MAS) leading Project Guardian-a collaborative initiative with major financial institutions to pilot asset tokenization and develop regulatory guardrails for digital securities and tokenized markets. This project aims to enhance market efficiency and set best practices for regulated tokenization [MAS, 2024].
• EU’s regulatory framework: In the EU, tokenized assets that qualify as financial instruments-such as tokenized securities and funds-are covered by MiFID II. This ensures that regulated tokenization activities, including issuance, trading, and custody of security tokens, fall under established securities laws and investor protections. MiFID II provides the legal clarity and operational standards needed for institutional adoption of regulated digital assets [ESMA]. 
• SEC Proposes Exemption for Tokenization and DLT Securities: The U.S. Securities and Exchange Commission (SEC) is considering an exemption order that would allow firms to use distributed ledger technology (DLT) to issue, trade, and settle securities. This move aims to modernize securities regulations and accommodate technological advancements [Ledger Insights, 2025].
• U.S. Regulators Give Banks the Green Light for Digital Asset Activities: Federal banking regulators, including the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC), have rescinded previous restrictive statements on crypto assets. This change permits banks to explore services like custody, payments, tokenization, and blockchain infrastructure [Chainalysis, 2025].
• Australia’s new approach: Australia has announced a plan to integrate digital assets into its economy, including pilots for tokenized money and a new licensing structure for digital asset platforms [Coindesk, 2025]. 

At InvestaX, regulatory compliance is foundational. We are licensed by the Monetary Authority of Singapore (MAS) under both the Capital Markets Services (CMS) License and the Recognized Market Operator (RMO) License. This regulatory standing enables us to:

• Issue and manage tokenized assets in accordance with securities laws.
• Operate a regulated secondary market for trading tokenized assets.
• Serve accredited and institutional investors across multiple jurisdictions through a secure, licensed infrastructure.

To learn more about solution for financial institutions entering the digital asset market, please visit investax.io 

2. Market Fragmentation and Liquidity Problem

Another critical barrier is the lack of standardization across tokenization platforms and protocols. This fragmentation hinders interoperability, making it difficult for different systems to communicate and for tokenized assets to move seamlessly across the financial ecosystem. Imagine a world where different stock exchanges couldn't communicate - the inefficiencies would be crippling. The same applies to tokenized assets.

As a result, asset managers often face duplicated onboarding, fragmented liquidity pools, and inconsistent investor experiences. 

Good sign: Ecosystems emerge to unify liquidity.

InvestaX and its ecosystem partners, including RWA protocols like XDC and BNB Chain, and its sister platform IXS, are uniting to offer a comprehensive solution for financial institutions to issue, manage, and trade tokenized assets globally. InvestaX serves as the issuance gateway for institutional-grade assets, while IXS provides the exchange and the liquidity layer for tokenized assets. Through our solution, financial institutions can reach both retail and institutional investors globally.

3. The Distribution Problem 

From tokenized treasuries to private credit, issuers have begun to see the benefits of tokenized assets: faster settlements, operational efficiency, and fractional ownership. However, the lack of reliable distribution networks has prevented tokenized financial products from reaching their full potential.

This is the barrier the industry is now working to overcome. 

The Good Sign: Distribution networks for tokenized assets are expanding.

For example, InvestaX has formed strategic alliances to connect tokenized assets with 20M+ verified investors across a 600M+ addressable market. Through Union Chain, tokenized assets have the potential to get exposure to verified users on regulated digital asset platforms across Southeast Asia. 

InvestaX’s Approach: Building a Compliant, Interoperable Solution

For institutional investors and asset managers, the message is clear: the barriers to tokenization are real, but they are surmountable. By choosing partners who prioritize compliance and interoperability, you can unlock the full potential of tokenized assets-today and into the future.

InvestaX provides the legal clarity, compliance standards and a robust market for tokenized assets that institutional partners require to enter and scale in the tokenized asset market with confidence.

Case Study: eVCC Project

InvestaX collaborated with UBS, State Street, and PwC on the eVCC (electronic Variable Capital Company) project in Singapore is a prime example. The project demonstrated how a blockchain-native fund structure can streamline issuance, distribution, and lifecycle management-while highlighting the need for regulatory clarity on digital share registers and transfer instruments

You can download the report of Project eVCC here. 

Ready to explore the world of tokenized RWAs?

Despite the complexities, institutional interest in asset tokenization continues to grow. Financial institutions like Goldman Sachs and BlackRock are exploring tokenization to enhance operational efficiency and unlock new investment opportunities. For example, BlackRock has filed to list digital shares tracking a $150 billion money market fund, potentially leveraging blockchain technology.  

Ready to explore the world of tokenized RWAs?

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