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Based on BlackRock Chairman Larry Fink's annual letter to shareholders, Real World Assets (RWA) are being built into the pipeline of Wall Street product offerings. Do the originators of the concept have a chance to be players here? Or will RWAs be run by Big Finance?
"It opens up the biggest land grab in history for financial institutions," Will Peck, Head of Digital Assets at Wisdom Tree, said about RWAs and tokenization more broadly during an American Banker event on Dec 2, 2025.
When the likes of Larry Fink speak about the tokenization of every financial asset, the crypto community is understandably conflicted.
Some crypto natives refer to RWA models now as simply "wrapped TradFi", whereas physical assets like land and real estate are digitized but everything around it is centralized within the usual Big Finance ecosystem.
"Token holders may gain liquidity, but they don't gain meaningful control or transparency," said Al Fahim. "I think that runs counter to the principles that crypto was founded on, and I don't think there's a quick fix that can remedy that."
RWA was born in the crypto universe. But it has been adopted by Wall Street giants, led by BlackRock.
The RWA market has reached an in 2025, driven by major financial players and blockchain technology.
RWA: Regulatory Concerns and Questionable Use Cases
GLD takes a little off the price, and investors can own gold shares for around $436 as of market close on Friday. In this case, investors are swapping Wall Street risk for crypto risk. This obviously gives Wall Street an edge. No one has hacks into an ETF and empties it clean.
Earlier this month, some $285 million was hacked from Drift Protocol It was the largest DeFi hack of 2026 so far, wiping out more than half of the exchange's total value locked.
All told, RWAs are usually described as a modernization of financial market "plumbing." That's how Fink describes it in his Annual Letter.
Building the RWA Rails: What the Blockchain Builders Want
Building the rails is where some of the blockchain plays will come in.
"Tokenization of real world assets isn't really a battle between crypto and traditional finance, I don't think. It's more about who ends up controlling the rails," said Denis Petrovcic, CEO of Blocksquare, a Slovenia-based RWA infrastructure company.
That's where the tension from the crypto community comes in. The original concept of tokenization was open markets, where ownership and liquidity can move freely. But if tokenization ends up happening inside closed systems, then crypto doesn't become a new financial system. It becomes the back end for the old one.
Wish Wu, a crypto founder with a deep background in Chinese fintech coming out of the Ant Group ecosystem, said he thinks the long term value of tokenized RWAs will be determined by whether they evolve into truly on-chain assets.
TradFi Has a Place. But the IMF Sends a Warning
BlackRock's "tokenize everything" idea might not sit well with people for a number of reasons. That's a separate topic. For now, institutional participation in this market is not inherently negative, said Al Fahim.
Large asset managers bring distribution and credibility to high-quality assets that are difficult to source in a purely crypto-native environment. "Without Wall Street bringing their expertise and capital to the table, it's hard to see the RWA market reaching $1 trillion, never mind $10 trillion," Al Fahim said. "What we're seeing right now is two very different systems trying to gel."
Traditional finance is moving on-chain to improve efficiency and distribution, while crypto is trying to ensure that openness and programmability aren't lost in the process. The outcome will likely be a hybrid model rather than a winner-takes-all scenario.
Meanwhile, The International Monetary Fund issued a warning on the tokenization game. They said in a report published in April that "the net effect of tokenization on financial stability is uncertain. Stress events are likely to unfold faster, leaving less time for discretionary intervention."
Artwork created by the author using Canva.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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