Outside Source
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Tokenization of real-world assets is often called a game-changer for finance since it’s supposed to streamline asset issuance, improve transparency, and open up investment opportunities. However, alongside the excitement, there’s also a lot of focus on regulation—specifically the Markets in Crypto-Assets Regulation. Many assume MiCA will set the stage for RWA tokenization, but in reality, its impact on institutional adoption is pretty limited.
Of course, MiCA is an important framework for certain types of digital assets, but it doesn’t cover tokenized securities like corporate bonds, equity, or structured debt as these remain under the jurisdiction of MiFID II, Prospectus Regulation, AIFMD, and UCITS. So, while MiCA is significant in its own way, its narrow scope leaves most tokenized financial instruments outside its direct regulatory framework.
MiCA’s narrow scope
MiCA is often called a huge step toward regulating digital assets. In many ways, it’s bringing much-needed clarity to areas like stablecoins and unregulated cryptos. But when it comes to real-world assets, its scope is much narrower than people realize. MiCA primarily applies to crypto-assets that aren’t securities, like E-Money Tokens (EMTs), utility tokens, and asset-referenced tokens (ARTs)—which typically track commodities like oil or gold.
The regulation excludes financial instruments that are already covered by existing laws. For instance, tokenized versions of securities like corporate bonds, equities, and securitized debt remain under the jurisdiction of MiFID II, the Prospectus Regulation, AIFMD, and UCITS.
Because of these exclusions, financial institutions aren’t waiting for MiCA to give them the green light on tokenizing RWAs. They’re focused on the regulations that have always governed these assets—adjusting their strategies within those frameworks.
Private sector innovation: A historical constant
There’s a common misconception that regulations drive financial innovation, but it’s usually the other way around. Markets evolve because institutions push efficiency, and thereafter, regulations evolve.
Think about how finance has changed over time. We went from paper stock certificates to electronic records and from manual trading floors to digital exchanges. And these weren’t just changes because of regulations. They happened because financial institutions saw the benefits of new technology and adopted it at a large scale.
Tokenization is following a similar path. It’s not a complete overhaul of the financial system, but it does modernize the way traditional assets are issued, transferred, and managed. The core financial products—bonds, equities, structured debt, and other private market instruments—stay the same, but the way they’re managed has evolved. Now, blockchain offers faster, more automated, and more transparent processes.
This is why MiCA isn’t the deciding factor in RWA tokenization. The institutions that manage these assets are already working within the existing regulatory framework, integrating blockchain where it makes sense.
Institutional adoption will lead the way
Some believe it’ll be web3 startups or crypto-native platforms that’ll move the needle on RWA tokenization. But the truth is, it’s the big financial institutions that have the most at stake, the deepest market knowledge, and the strongest regulatory experience. They’re the ones driving meaningful adoption, but they will likely leverage existing web3 infrastructures to integrate blockchain into traditional finance. Therefore, these platforms must comply with DORA’s cybersecurity and operational resilience requirements while remaining user-friendly, adaptable to different financial institutions, and flexible enough to align with their clients’ structures and interests.
Investment banks and asset managers are already big players in structured finance and securitization, where tokenization really shines: faster settlement, automated compliance, and lower costs. Pension funds and endowments are considering tokenized private market assets—like private equity and debt—as a way to improve liquidity in traditionally illiquid markets. Retail banks could offer tokenized bonds and fixed-income products in fractionalized form, which makes them more accessible to a wider investor base. Each of these entities has its own reasons for exploring tokenization, but they’re all looking for efficiency. These institutions are leading the charge—because the business case for blockchain makes sense.
Blockchain-based solutions can provide financial actors tools to cut settlement times, reduce admin overhead, and make ownership and transactions more transparent.
Primary issuance is the real opportunity
Tokenization is all the rage right now. People are saying it’ll totally change secondary trading. But most financial institutions aren’t focusing their efforts on that right now. Instead, the real momentum is in primary issuance—the process of creating and distributing new financial assets.
Today, when a company wants to issue a bond, it has to deal with a lot of intermediaries, legal hoops to jump through, and slow, manual processes. Tokenization makes this easier by embedding compliance rules into smart contracts, automating post-trade reporting, and reducing the need for intermediaries.
That’s why the big financial players are already trying out tokenized primary issuance. JPMorgan’s Onyx platform handles blockchain-based settlements, Goldman Sachs has successfully piloted tokenized bond issuances, and BlackRock has launched a digital liquidity fund on Ethereum (ETH). Franklin Templeton has also issued tokenized funds on the Stellar blockchain. These aren’t theoretical use cases—they’re real-world examples of institutions leveraging blockchain where it makes the most sense. The goal is to make issuance more efficient.
Financial actors are exploring both permissioned and permissionless blockchains, depending on the specific regulatory, operational, and market needs of each institution. This dual-track approach reflects the reality that some players prefer the controlled environments of permissioned networks while others are beginning to leverage the transparency, composability, and global investor access offered by public blockchains.
The “industrialization of finance” is already underway
If blockchain adoption continues along its current trajectory, we’re heading toward what I like to call the industrialization of finance. Just as manufacturing became more efficient with assembly-line automation, financial markets are gradually moving toward faster, more scalable, and more automated processes—and tokenization is part of that shift.
But here’s the thing: for tokenization to really take off in traditional finance, it’s got to meet the current rules and standards. That means following MiFID II, making sure it’s in line with the Prospectus Regulation, and, most importantly, working with DORA. This act has some pretty strict rules about cybersecurity and risk management for any blockchain infrastructure integrated into financial institutions.
Bottom line
MiCA is definitely a huge move in the world of digital asset regulation, but it’s not going to be the main driver behind the widespread tokenization of real-world assets. Financial institutions aren’t waiting for MiCA’s implementation, as the key assets that will be tokenized are already regulated under existing financial frameworks that they operate within daily.
The real forces shaping RWA tokenization are financial market participants and the relentless pursuit of efficiency. Financial institutions will continue integrating blockchain where it makes sense.
So while MiCA will certainly impact parts of the digital asset landscape – particularly crypto-native projects and stablecoins – it’s not the framework that will define the future of tokenized finance. That future belongs to the institutions already shaping the market today.
This article first appeared at crypto.news
