At its core, tokenization is meant to streamline existing market infrastructure and not complicate it. | Image credit: Veronica Cestari
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Key Takeaways
The RWA label groups very different assets, creating confusion around risk and ownership.
Most tokenized RWAs depend on issuers, which introduces credit risk.
Gold holds value on its own and does not rely on counterparties.
On-chain finance will depend on clear asset distinctions and stronger collateral.
The term “real-world assets” (RWA) is increasingly obscuring more than it explains.
What started as a way to describe tangible assets on-chain has become a vague catch-all category that includes everything from private credit to invoices to even carbon credits.
While the label served its purpose during early experimentation, the language around RWAs is now failing to mature alongside market growth, leaving participants to navigate different instruments under a single, imprecise banner.
Under the current RWA umbrella, assets with fundamentally different risk profiles, liquidity characteristics, and trust assumptions all sit together.
Many so-called RWAs aren’t even assets in their own right, but tokenized representations of contractual claims: dependent on issuers and counterparties.
Treating them as a single category blurs the crucial distinction between owning an asset and relying on a promise, and for institutional participants in particular, the distinction underpins everything from capital treatment to risk management.
As tokenization matures, making this distinction is critical because it can lead to mispriced risk and misplaced expectations.
But gold exemplifies the type of foundational, trusted asset that will underpin the future of finance.
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Most tokenized RWAs derive value from expectations: expected cash flows, expected borrower behavior, expected policy decisions.
Tokenized bonds and fiat-backed instruments all depend on issuers and intermediaries to honour obligations.
Even when settlement is automated on-chain, the underlying asset is still subject to credit risk and institutional trust.
These dependencies aren’t flaws, but they do place such instruments firmly in the realm of financial products rather than base assets.
Gold is different. It carries no credit risk, no dependency on economic growth, and no reliance on borrower performance.
Its role as a store of value and reserve asset predates modern financial markets by centuries.
According to the World Gold Council, gold remains a core reserve asset for central banks precisely because it’s no one else’s liability: a distinction few other RWAs can claim.
This makes gold one of the rare assets whose value exists independently of financial engineering.
When tokenized, gold is a direct representation of its real-world value, simply delivered through modern infrastructure; it isn’t transformed into a synthetic product or contractual abstraction.
Instead of the token creating the value, it merely improves how that value is accessed and verified.
Tokenization Without Financial Engineering
Many tokenized RWAs rely on structural complexity to be investable.
Tranching, leverage, yield engineering, and synthetic exposure are often necessary to make assets compatible with open, programmable systems.
These layers aren’t accidental; they compensate for assets that were never designed to function natively in global, liquid markets. This often introduces opacity exactly where transparency is most needed.
Tokenized gold requires none of this. The asset already works. Tokenization improves access, settlement, and transparency without altering its underlying economics or even changing its legal title.
It also provides continuous visibility into reserves, issuance, and redemption mechanics via on-chain attestations.
This simplicity is its defining advantage.
At its core, tokenization is meant to streamline existing market infrastructure, and not complicate it.
Gold tokenization succeeds precisely for this reason: it removes friction without introducing layers of abstraction, or modernizes the rails without redesigning the vehicle.
“Treating all RWAs as interchangeable leads to mispriced risk and unrealistic expectations.” | Source: Kurt Hemecker
From RWA to Real-World Infrastructure
The tokenized gold market has quietly grown into one of the largest segments of on-chain RWAs.
By 2025, tokenized gold surpassed $2.5 billion in market capitalisation, outpacing many more complex tokenized credit products.
This growth occurred without aggressive incentives or structural experimentation, reinforcing a demand for credibility.
More importantly, growth has concentrated around a narrow set of characteristics: allocated and insured gold, clear custody and redemption rights, and transparent governance and attestations.
This evolution signals the digitisation of an existing asset class rather than the creation of a new one. The market is no longer optimising for experimentation, but for robustness.
Liquidity depth, custody quality, and credibility now matter more than novelty.
This mirrors earlier phases of financial infrastructure development, where standardization and trust ultimately outpaced innovation for innovation’s sake.
The winners weren’t necessarily the most inventive structures, but the reliable ones.
Why Confusing RWAs Leads To Mispriced Risk On-Chain
Treating all RWAs as interchangeable leads to mispriced risk and unrealistic expectations. Some tokenized assets are investments, designed to generate yield in exchange for exposure to credit, duration, or operational risk.
Others, like gold, function as building blocks: collateral for lending and balance-sheet stabilizers. Conflating the two undermines the very efficiencies that tokenization can deliver.
As decentralized finance (DeFi) converges with traditional finance, this distinction will become more pronounced.
Collateral quality will matter more than yield. Familiar assets on modern rails will scale faster than complex instruments wrapped in novelty.
The IMF has highlighted that as market structures evolve and new risks emerge, resilience and robust market functioning, underpinned by high‑quality assets, are essential for financial stability.
Tokenized gold’s trajectory suggests it isn’t just a part of the RWA category. It defines what the category was ultimately meant to represent: the seamless, trustworthy bridge between physical value and the efficiency of digital utility.
Disclaimer:
The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.
About the Author
Kurt Hemecker
Kurt Hemecker is the Chief Executive Officer of Gold Token S.A., an MKS PAMP company leading the tokenization of physical gold to create secure, transparent, and accessible digital assets backed by real-world value. Under his leadership, Gold Token SA is redefining how gold is owned, traded, and integrated into modern financial ecosystems, bridging traditional finance with blockchain innovation.
