The 2025 RWA Hype Check: What’s Real, What’s Vaporware

The RWA narrative has become crypto’s favorite trillion-dollar story. Visit any conference, scroll through any investment deck or video presentation on X, and you’ll hear the same refrain: trillions in traditional assets are about to flood on-chain.

So it’s time to examine what’s actually happening.

As of mid-2025, roughly $300 billion in assets are categorized as RWAs on-chain. However, almost $277 billion of that figure is stablecoins. Excluding them, the RWA sector represents about $24-25 billion in value. That number has grown two times year on year, demonstrating significant progress; however, in a global context, it remains negligible, approximately 0.01% of the world’s $250 trillion in financial assets.

This illustrates both momentum and limitation: real adoption is beginning, but scale remains small. The areas where RWAs have gained traction reveal the types of assets that benefit from tokenization and the infrastructure still required to support them.

Private Credit: Now the Largest Segment

Private credit has overtaken all other categories to become the largest RWA market on-chain, with ~$15.5 billion in active loans and over $28 billion originated to date. The segment is dominated by Figure, which manages more than $11 billion in outstanding loans, followed by Tradable ($2.1B), Maple ($1.1B), and smaller but notable contributors like PACT, Centrifuge, Goldfinch, Credix, and TrueFi.

The growth of private credit reflects demand from both sides:

• Borrowers (fintechs, SMEs, alternative lenders) gain access to more efficient capital than traditional credit markets allow.

• Investors benefit from double-digit yields (average APR ~9.7% as of August 2025), uncorrelated with crypto volatility.

However, the segment is still maturing. Most loan tokens remain illiquid until maturity, defaults have occurred in the past (notably Maple in 2022), and nearly all participation requires KYC/AML compliance. Even with these constraints, private credit shows how RWAs can deliver real yield products at scale, and protocols are increasingly competing to capture institutional investor

Treasuries: Institutional Safe Yield

Tokenized Treasuries remain the most institutionally validated use case, with around $7.4 billion on-chain. Growth has been explosive, over 500% year-on-year, because Treasuries combine risk-free yield (4–5%), high collateral quality, and immediate settlement once tokenized.

• BlackRock’s BUIDL Fund alone manages $2.5 billion, making it the single largest tokenized Treasury product.

• Franklin Templeton’s BENJI tokens span multiple chains and hold ~$700M.

• Ondo Finance has drawn over $1B into OUSG (a tokenized Treasury ETF) and USDY (a yield-bearing stablecoin wrapper).

• OpenEden’s TBILL, with custody by BNY Mellon, has found adoption in DAO treasury management.

• Archax, an FCA-regulated UK exchange and custodian, is building tokenized money market fund offerings for institutional clients.

Treasuries have become the anchor of the RWA market because they solve a clear problem: institutions and protocols need low-risk, dollar-denominated yield that can also function as collateral. Tokenized Treasuries provide that in programmable form.

Gold Gets Digital

Commodities were once expected to be a broad category for tokenization, but only gold has reached scale. Tether Gold (XAUT) and Paxos Gold (PAXG) together represent more than $2.1 billion in tokenized bullion.

• XAUT (~$1.2B) is backed by vaulted gold in Switzerland and tradable in fractional units.

• PAXG (~$950M) is NYDFS-regulated and backed 1:1 by London Good Delivery bars.

Both tokens are integrated into DeFi lending pools as collateral and trade 24/7. Their adoption shows that assets with global recognition, fungibility, and straightforward custody models are natural fits for tokenization. By contrast, other commodity experiments have faltered:

• Carbon credits were derailed when registries like Verra restricted tokenization.

• Oil and silver remain illiquid, with little traction.

The lesson is that tokenization works best for assets where fractionalization and global transferability add clear value, gold checks both boxes.

Equities: Still Searching

The 24/7 stock market vision remains a small and experimental segment..

Backed Finance offers tokenized S&P 500 exposure on Kraken and Solana, total assets under management (AUM): $50 million. Securitize tokenizes private equity funds for accredited investors.

Combined public equity tokens? Market capitalization under $100 million.

The infrastructure to tokenize equities is not the issue. Custody solutions, trading platforms, and smart contracts exist. The obstacle is legal: public equities require clear regulatory frameworks that most jurisdictions have yet to provide. As a result, today’s equity tokens are private placements with limited distribution, not freely tradable public securities.

Stablecoin Hybrids

Ethena illustrates how RWAs and synthetic structures converge. Its synthetic dollar USDe is hedged via crypto derivatives, but now partially collateralized by USDtb, a stablecoin tied to BlackRock’s tokenized money market fund BUIDL. This design injects RWA-backed stability into a crypto-native product. Ethena is also pushing infra with Converge, a dedicated RWA chain built with Securitize to blend institutional compliance and permissionless DeFi.

Let’s address the persistent myths:

“Tokenization creates instant liquidity”
Only treasuries and gold have meaningful secondary markets. Real estate tokens? Art fractions? Still effectively IOUs waiting for buyers.

“Billions in AUM means billions in DeFi”
Most RWA tokens live in permissioned walled gardens. OUSG, TBILL, and gold tokens circulate freely. Everything else requires whitelists.

“Tokenization replaces traditional ownership”
Almost every RWA token represents claims through SPVs and custodians. Legal ownership stays off-chain. Smart contracts manage representations, not rights.

“On-chain means secure”
Transparency helps. But custody risk, counterparty risk, and smart contract risk don’t disappear. They just become visible.

Total excluding stablecoins: $24-25 billion. Doubling annually. Meaningful progress. But still 0.01% of global assets.

RWAs don’t move alone; they ride stablecoin rails. And stablecoin issuers are building their own chains to capture that flow.

Circle’s ARC: USDC-native L1 with sub-second finality and built-in FX engines. Stripe’s Tempo: A payments blockchain for their global merchant network. Converge: Arbitrum’s institutional-DeFi hybrid.

This isn’t about community tokens or governance experiments. It’s about who controls the settlement layer for tokenized value. By the size of the companies joining in, the battle for stablecoin infrastructure might become the most important competition in crypto.

On Tempo, permissionlessness, L1 vs L2

Tempo will be a permissionless chain. On day 1, anyone will be able to deploy a token, and anyone will be able to transact on the chain. Some projects think that attracting real-world usage and serious institutions requires giving up on…

— Matt Huang (@matthuang) September 6, 2025

Here’s what every RWA project discovers eventually: tokenization without verifiable data is just digitized trust.

Treasuries need real-time NAV calculations. Gold requires auditable proof-of-reserves. Private credit depends on transparent repayment tracking. Equities need corporate action feeds. Every stablecoin requires collateral attestations.

The uncomfortable truth? Most RWA projects today rely on the same trust assumptions they claim to eliminate. Price feeds come from single providers. Reserve proofs depend on attestations. NAV calculations happen off-chain.

We’re building trillion-dollar ambitions on black-box infrastructure.

The market is experimenting with solutions:

• zk-proofs for cryptographic reserve verification
• Multi-party computation for distributed trust models
• Rollup-based processing for verifiable computations
• Cross-chain attestation for unified liquidity

But until data infrastructure matches tokenization capabilities, RWAs remain sophisticated IOUs with API dependencies. The oracle layer, as unglamorous as it sounds, represents the actual bottleneck between today’s experiments and tomorrow’s institutional adoption.

RWAs aren’t just hype anymore. Billions in treasuries and gold prove the concept. Private credit shows promise despite risks. Equities need regulatory progress. Stablecoins are evolving into yield-generating infrastructure.

The narrative needs adjusting, though. This isn’t about tokenizing everything it’s about identifying where blockchain infrastructure genuinely improves financial efficiency.

At ~$25B excluding stables, RWAs are still a small fraction of global assets, but growth rates are high. The sector is moving beyond hype: adoption is real, concentrated in the categories where tokenization clearly improves financial efficiency. Over the next phase, progress will depend on scaling liquidity, building robust oracle infrastructure, and bridging the regulatory gaps holding back equities and other asset types.

RWAs are becoming crypto’s yield layer, not through speculation but through boring, reliable, institutional-grade infrastructure. They won’t deliver 100x returns. But they’re quietly embedding traditional finance inside blockchains, one treasury token at a time.

What’s your take on RWA adoption? Which sectors will break through next? Join the discussion.