EXPERT OPINION | Tokenization Alone Will Not Fix Illiquid Assets, Say Industry Experts

Tokenization of real-world assets does not automatically solve liquidity challenges, despite rapid growth in the sector, industry participants said at a panel during Paris Blockchain Week.

Speakers noted that while tokenization can make traditionally illiquid assets – such as real estate or private credit – more accessible, it does not guarantee active trading or demand in secondary markets. Liquidity, they said, depends on underlying market dynamics rather than the technology itself.

“I think there’s still this idea that tokenizing something illiquid will somehow magically make it a liquid asset, which is just not true,” said Oya Celiktemur, Ondo Finance Sales Director for Europe, the Middle East and Africa (EMEA).

According to Solomon Tesfaye, Chief Business Officer, Aptos:

“For liqudity, you need market makers, you need buyers and sellers, you need price discovery, you need clear regulation, you need legal clarity around custody. I can keep going.

There is a whole bunch of stuff that you need to facilitate and open up liquidity and this really helps.”

To enable secondary liqudity, Hein Tibosch, Head of Digital Assets OTC & Products at Flow Traders, highlighted a crucial aspect:

“I would say the big thing that is missing is true commitment. The demand will come but I think its really dependent on the commitment. 

One of the things that we see is the listing of these RWAs on exchanges. Is there a true push by these exchanges to present it to their customers, not as a token, but as a true asset class?

We also really welcome more market makers to be active in the space. The more buyers and sellers there are, the more liqudity there will be. Its a chicken and egg story.” 

Francesco Ranieri Fabracci, Head of Tokenization Expansion at Tether, added:

“Market makers are super important in this ecosystem because they have played a fundamental role in the traditional ecosystem so far, and they will be the ones that bring probably the most liqudity in this market.

Once they are fully convinced to move into the blockchain, into the tokenization space, the entire market will change a lot.”

Oya added:

“The initial adopters of tokenized assets particularly like the ones we’re doing, we’re giving access to U.S listed stocks and ETFs, that was a very natural fit for retail clients in regions that couldn’t efficiently and cheaply access U.S markets like APAC, LATAM, or Africa. Most of our initial TVL has come from that client base who wanted to access U.S markets.

I think the next phase will be more institutional where asset managers and by-side players are looking to replicate their strategies on-chain. They trade a lot more and a lot bigger and I think that is going to be truly impactful.”

“The type of assets that have primarily been tokenized today have mostly been money markets and private credit. Historically, other than assets that have not traded at high volume, mostly buy-and-hold assets, I do think you’re going to see more secondary liquidity as people start to shift to traditionally very liquid products.”

The discussion comes as the tokenized real-world asset (RWA) market has expanded sharply. Growth has been driven largely by standardized and widely traded assets, including tokenized government debt and commodities as data from RWA.xyz shows.

Panelists emphasized that highly liquid, in-demand assets are more likely to benefit from tokenization, as they support

• continuous trading,
• collateralization, and
• broader network effects.

Less liquid or niche assets, by contrast, often struggle to attract sufficient market participation.

They added that while tokenization can improve efficiency, transparency and fractional ownership, it cannot ‘magically’ create liquidity where it does not already exist, underscoring the need for stronger market infrastructure and investor demand.

“It’s not that if you put an asset onchain, it will be liquid. It doesn’t work like that at all,” said Francesco Ranieri Fabracci, Head of Tokenization Expansion at Tether.

Distribution also matters as Hein explained:

“If you think about 10 years back when the Coinbases and all the big platforms were founded, over the years, they kept a lot of the AUMs from the traditional players, and it all moved to the Coinbases of the world. If you talk about who owns these relationships, its the platforms that can pull triggers and they can really move the needle to offer it to their customers.

On the distribution side, it is about where the relationships really sit and I think its a really great opportunity for the more native crypto players to move forward and be active in the space.”

What is accessible to retail clients will also determine what gains traction as Solomon explains:

“Private placements are going to be reserved to accredited investors, so inherently, a minimum requirement to be a private investor or minimum cheque size is prohibitive to retail participants, so that is why registered securities like public equities and those kinds of applications are naturally going to have broader adoption.

The tokenized RWA market has grown by almost 4x YoY to hit ~$30 billion by April 2026.

The debate highlights a broader shift in the industry as tokenization evolves from a hype-driven narrative toward more practical, institutionally-backed use cases focused on liquidity and scalability.

Stay tuned to BitKE for deeper insights into tokenization globally.

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