Tokenized Real-World Assets

The most immediately useful application of tokenization is not a new asset class. It is making existing collateral productive.

Derivatives positions require posted margin. Historically that margin sits as cash or stablecoins, earning nothing. Tokenized money market funds. BlackRock’s BUIDL, Ondo’s OUSG, Superstate’s USTB, Circle’s USYC and comparable instruments, are now accepted as collateral on major derivatives venues including Deribit, Crypto.com, and Binance through triparty arrangements.

The effect is that capital securing a hedged position can simultaneously hold short-duration Treasury exposure. That changes the composition of return on capital already committed. It also introduces issuer credit, redemption and transfer risk on the instrument posted, and does not remove the risk of capital loss.

These instruments are redeemable against their issuers and hold short-dated government securities. Access is generally limited to qualified purchasers.

Beyond Treasuries, a growing set of regulated funds and credit instruments are issued on-chain with permissioned, KYC-gated transfer restrictions: tokenized private credit, tokenized private equity and alternatives vehicles, and tokenized commodities.

The questions that decide whether such an instrument is sound are the same ones that apply to any holding: issuer credit, legal structure, redemption mechanics, and liquidity. The token is a record of ownership, not a change to the underlying claim.

Eligibility for these instruments varies. Several are restricted to qualified purchasers or to non-US persons.

For investors outside the United States, tokenized instruments can provide exposure to asset classes that are otherwise operationally difficult to reach, requiring US brokerage relationships, local custody arrangements, or minimums that exclude most allocators.

On-chain issuance collapses much of that. Settlement is near-instant. Markets operate continuously. Positions are held in the same custody infrastructure as the rest of the portfolio, reported in the same statements, and reconciled in the same NAV.