RWA tokenization accelerates expansion: continuously extending the asset boundary from government bonds to stocks

In April 2026, the global asset management giant Franklin Templeton released a research report that sparked widespread industry discussion, defining 2026 as the inaugural year of RWA (Real World Asset) tokenization explosion. The report pointed out that RWA tokenization is experiencing exponential growth: since 2023, it has grown estimated by 5 times, and between 2025 and 2026 alone, it has tripled, starting from about $5 billion in 2023, with on-chain value now exceeding $25 billion. Private credit, government bond products, and real estate account for the vast majority.

More notably, the scope of tokenization has extended from government bonds and money market funds to stocks. Robinhood first offered over 200 tokenized US stocks to EU customers in June 2025, followed by the crypto exchange Kraken launching xStocks on Ethereum and Solana, and Ondo Global Markets launching over 200 tokenized stocks in September 2025. This leap from fixed income assets to equity assets marks that RWA tokenization has moved from experimental exploration into a phase of large-scale expansion.

What signals does Franklin Templeton’s research release?

Since launching its first tokenized money market fund in April 2021, Franklin Templeton has accumulated nearly $1.5 billion in assets under management on the Benji technology platform, operating 24/7 without interruption. In March 2026, Franklin Templeton further announced a partnership with RWA platform Ondo Finance to issue tokenized versions of five ETFs tracking stocks, bonds, and gold, initially available in Europe, Asia-Pacific, the Middle East, and Latin America.

The report was authored by Franklin Templeton’s innovation director Sandy Kaul, systematically outlining the development path, technical architecture, and future outlook of RWA tokenization. The core conclusion is that tokenization has extended from government bonds and money market funds to stocks, and this turning point has ignited the acceleration engine of the entire RWA tokenization process. The full involvement of traditional financial institutions—including DTCC receiving an SEC no-action letter, NYSE announcing the development of a tokenized securities trading platform, and Nasdaq collaborating with Kraken’s parent company to launch equity token design—together form the institutional and technological support for this transformation.

From marginal experiments to mainstream consensus

RWA tokenization is not a new concept. Franklin Templeton entered the space as early as 2021, but in the following years, this track mainly remained within the experimental scope of a few pioneers. What truly triggered a structural market change were the following key milestones:

In 2023, the tokenized US Treasury market started from less than $200 million, with institutional products like BlackRock’s BUIDL fund beginning deployment on Ethereum.

In June 2025, Robinhood announced offering tokenized US stocks to EU clients, and Kraken launched xStocks. In September of the same year, Ondo Global Markets launched over 200 tokenized stocks.

In December 2025, DTCC received an SEC no-action letter, paving the way for tokenized RWA custody via DTC.

In March 2026, Nasdaq received SEC approval to test tokenized securities trading rules, allowing some securities to be traded in tokenized form on exchanges. In the same month, Franklin Templeton announced a partnership with Ondo Finance to tokenize five ETFs.

By April 2026, the total market size of tokenized RWAs surpassed $27.65 billion, with government bonds leading at $12.78 billion, and tokenized stocks approaching the $1 billion threshold.

This timeline shows that RWA tokenization is undergoing a three-stage transition from “institutional testing” to “infrastructure support” and then to “regulatory framework formation.” Franklin Templeton’s designation of 2026 as the explosion year is based on the concentrated release of these structural changes within the same time window.

Three main paths and market scale

Market size overview

As of April 2026, the total market size of tokenized RWAs has exceeded $27.65 billion, with a 4.07% increase over the past 30 days, contrasting sharply with most other crypto sectors. The distribution across asset classes is as follows:

U.S. Treasuries lead with $12.78 billion, accounting for about 46%. Commodities amount to approximately $5.4 billion, asset-backed credit about $3.19 billion. Tokenized stocks are around $941 million, with a monthly transfer volume of $2.94 billion, an 85.78% increase, indicating trading activity far exceeding the existing on-chain volume.

In the government bond segment, as of March 2026, the top five protocols are Circle USYC, BlackRock BUIDL, Ondo OUSG, Franklin Templeton BENJI, and Ondo USDY. Ethereum accounts for about 57% of the total RWA locked value, making it the primary on-chain infrastructure.

In the stock tokenization sector, Ondo Finance holds about $557 million, capturing 60.07% of the market, covering 230 products across 8 asset classes. Backed’s xStocks platform accounts for about $243 million, with a combined market share of over 86%.

Three tokenization paths

Franklin Templeton’s report proposes that in the coming months, three types of tokenized products will emerge in the market.

First, native digital tokenized products. These tokens directly hold the underlying assets, with token holders enjoying full ownership and related protections. Ownership records are maintained on a single on-chain ledger, with no off-chain records. After verification, funds and assets are atomically settled immediately. Franklin Templeton’s own tokenized money market fund belongs to this category.

Second, synthetic asset tokens. These tokens indirectly mirror the price of the underlying assets through derivative structures, without transferring actual ownership of the underlying assets. The advantages include higher composability and lower compliance barriers, but holders do not have direct shareholder rights. Most tokenized stock products currently fall into this category.

Third, hybrid structure tokens. These combine features of native digital and synthetic assets, enabling on-chain circulation within a compliant framework, while holding the underlying assets through special purpose vehicles (SPVs) or similar structures, balancing legal rights and on-chain composability.

Most tokenized stocks in the current market are still transitional, essentially packaged derivatives rather than truly on-chain assets. They face issues like inconsistent trading times, inability to redeem in real-time, and unclear asset ownership. This indicates that moving from synthetic assets to native digital tokenization still requires further maturation of regulatory frameworks and technological infrastructure.

Public opinion: optimism and rational assessment coexist

Regarding RWA tokenization, the market shows several representative viewpoints:

Optimists’ core arguments: Tokenization is the most significant upgrade in securities operation since the introduction of ledger-based record-keeping in the early 1970s. Larry Fink, CEO of BlackRock, has stated that “every stock” and “every bond” could eventually be tokenized, making markets faster, more efficient, and cheaper. Robinhood CEO Vlad Tenev vividly described: “Tokenization is like a freight train that cannot be stopped and will eventually engulf the entire financial system.”

Rational data support: On-chain RWAs amount to about $26 billion, while the total investable assets worldwide are in the trillions of dollars. Franklin Templeton’s tokenized money market fund has achieved 24/7 operation, but US regulation remains unclear, and on-chain funds have not shown signs of “takeoff.” In fact, the actual DeFi utilization rate of tokenized Treasuries remains limited—about 88% of RWA-backed stablecoins stay on-chain but have not fully entered DeFi protocols. KYC and whitelist restrictions hinder the combination of permissioned tokens with open DeFi protocols.

Recognition of structural challenges: Tokenized stocks face the “impossible trinity”—it’s hard to simultaneously achieve liquidity/speed, regulatory safety/direct shareholder rights, and DeFi composability. Ondo has achieved extreme capital efficiency, but tokens face strict transfer restrictions in some jurisdictions; xStocks uses Swiss debt structures to enable DeFi freedom of composition, but token holders lack voting rights and direct ownership. These structural costs lead to market stratification: institutional funds seeking legal certainty prefer compliant solutions, while on-chain liquidity and yield-seeking funds favor more composable products.

Industry impact analysis: from asset on-chain to income tokenization paradigm shift

The industry impact of RWA tokenization is reshaping the boundaries between crypto markets and traditional finance across three levels.

First layer: migration of traditional financial infrastructure onto the blockchain. DTCC aims to migrate nearly $100 trillion of securities custody to blockchain. S&P Dow Jones indices have tokenized their iBoxx US Treasury index on Canton network, with index benchmarks becoming digital assets. When clearing and custody institutions and index providers begin tokenizing core benchmarks, it signals a fundamental infrastructure transformation.

Second layer: shift from “holding” to “utility” of tokenized assets. By March 2026, the tokenized government bond market reached $11.92 billion, but the key is whether these income-generating digital assets can serve as productive collateral rather than just idle in wallets. Standard Chartered and Franklin Templeton’s collateral mirror project allows institutional clients to use tokenized money market funds as OTC collateral, marking a substantive move from concept validation to actual integration into capital markets.

Third layer: reshaping asset structure in crypto markets. Tokenized Treasuries introduce risk-free rates into on-chain infrastructure. BlackRock’s BUIDL fund on Ethereum gathered over $500 million within weeks of launch. Franklin Templeton’s tokenized money market fund grew similarly fast. Once on-chain, tokenized Treasuries can serve as collateral in lending protocols and be combined with other RWA tools in structured products, unlike traditional brokerage accounts’ money market funds. Yield remains stable, but the scope of use cases expands significantly.

Fourth layer: accelerated formation of global regulatory frameworks. SEC’s approval of Nasdaq’s tokenized securities trading rules and DTCC’s no-action letter provide key institutional signals. The EU’s MiCA regulation has come into effect, establishing a unified compliance framework for RWA. Hong Kong’s “Stablecoin Regulations” enacted in August 2025 became the world’s first dedicated regulatory framework for fiat-backed stablecoins, promoting cross-border financing pilots for new RWA assets. China’s Hainan Free Trade Port launched a “regulatory sandbox-mainnet” dual-channel architecture. These proactive regulatory stances in Asia and the US’s gradual approach are creating two distinct development models, accelerating the global deployment of RWA infrastructure.

Conclusion

Franklin Templeton’s designation of 2026 as the year of RWA explosion is driven by a series of structural changes: government bond tokenization surpassing $1M, stock tokenization rising from zero to nearly $1 billion, NYSE and Nasdaq initiating on-chain trading platforms, and global regulatory frameworks moving from ambiguity to clarity. The divergence among three tokenization paths indicates that the market is transitioning from early experimentation to a new phase of standardization and scale.

Meanwhile, a gap remains between narrative and reality. Most current tokenized stocks are still transitional derivative packages, and the infrastructure for truly native on-chain issuance is not yet mature; DeFi composability of tokenized Treasuries is limited by KYC and whitelist mechanisms; US regulation, while signaling positivity, still awaits specific legislation. The next phase of RWA tokenization will depend on the speed of regulatory infrastructure development, continuous institutional capital inflows, and breakthroughs in cross-chain interoperability. What is certain is that the leap from government bonds to stocks has been completed, and this transformative shift in the global capital market’s foundational architecture is moving from the labs of early pioneers toward the core of the financial system.