Real World Assets (RWA) are quickly turning into a major talking point in crypto. By turning traditionally hard-to-trade assets like bonds, real estate, and stocks into tokens, blockchain is creating a whole new space where investors from around the world can jump in without the usual hurdles.
A great example is Ondo Finance, which just rolled out over 100 tokenized stocks on various exchanges and DeFi platforms, calling it "Wall Street without the wall." That seems like a big move towards getting mainstream acceptance.
Now, the SEC has classified tokenized stocks as securities. Looking at previous rulings, the outcomes have been all over the place:
Bitcoin ETFs: SEC approval led to a massive influx of money and more credibility (definitely bullish).
ICOs (2017-18): Crackdowns took the market down (super bearish).
Stablecoins & XRP: Regulatory pressure held back adoption and caused sell-offs.
For DeFi platforms like Maker, Aave, and Ondo that are already working with RWAs, this could go one of two ways:
Bullish: Clear regulations could bring in institutions, increasing liquidity and credibility.
Bearish: Heavy compliance might drive projects to operate outside the U.S. and limit access for regular users.
So what's the verdict? Is this a good or bad sign?
I have seen a real estate token, project but the worst thing is that most of them never ended well, so physical stocks and securities tokenized projects that aimed at anything other than providing liqudities for the project is going to fail in the long run, and the only way for those tokens to do well is when their limit the scope to only being project being a utility token but anything that make them get exposed to the global exchange market, their will hardly survive on that level.
It is bearish for Real World Asset (RWA) projects but not the entire crypto market.
The top majors like Bitcoin, Ethereum or even solana have almost exposure even though some projects building on their chain and ecosystem might be RWA-focused. Now, it is bearish for those projects because tokenized stocks used to be one of their loudest message whenever the topic of RWA was mentioned in crypto.
If anyone wants stocks but don't want to deal with tokenized version, they can just create an onchain stock market protocol. Only problem is that the stock market has its time window for opening and closing whereas crypto is 24/7, 7 days a week, 30 days a month and 12 months a year.
To me it is pretty clear those who are interested the most on this new market to go bearish are the owners and operators of brokers and stock providers. If these protocols got their way and managed to give access to the stock market to people without having to rely on centralized services, then it would be just matter of time for those brokers to lose a significant percentage of their volume and thus a significant percentage of their profit.
The SEC in this case will undoubtedly side with brokers and try to keep stocks as centralized as possible, the SEC and the people behind it are already feeling uncomfortable with having to allow people to trade Bitcoin freely, they don't want to lose the stock market to people who develop defi protocols.
I will be honest I've never seen tokenized stock on-chain. On the other hand there are many commodities get tokenized.
That one time I see tokenized stock is from CEX which shouldn't count for a tokenized stock in the first place since it's off chain and the CEX is responsible for it.
I don't think it's that big of a bad news since RWAs are dealing with tbills to issue their stablecoin anyway which dominates big part of their business not stock.
Really? I mean a whole lot of those cexes offer onchain trading these days and the trading of tokenized stocks are actually done onchain because you can monitor them in realtime using lookonchain or coinglass or any other onchain watchdog.
Ondo finance recently announced partnering with several exchanges to bring these tokenized stocks onchain
Tokenized stocks is a stupid idea. It is just a duplication of an existing thing, it does not bring many benefits at all. Of course it is a security, it derives its value from another financial instrument the stock. Natively issued stock on the blockchain would be a game changer though, they would not be securities as they would not be deriving their value from another financial instrument.
ONDO is shit.
Most RWA is just a fad, it won't have any impact on the entire crypto market.
That was exactly my point. I see a lot of people placing RWA as one of the most important sector in crypto and I'm always wondering why they tend to think like that. Not everything has to be tokenized and onchain. A wise man once said:
RWA outside of crypto just works outside crypto. There's no need to add an extra complexity to everything. Most of the teams raising for RWA is just outright fraud.