5 Reasons Tokenization of Real-World Assets Surpasses Real Estate

Tokenization of Real-World Assets: A Paradigm Shift

Michael Sonnenshein Challenges Real Estate’s Dominance

During a recent panel at Paris Blockchain Week, Securitize COO Michael Sonnenshein expressed skepticism regarding the tokenization of real estate as a primary use case for real-world assets (RWAs), suggesting that emerging liquid assets may better serve the onchain economy’s demands. Despite industry predictions of RWAs reaching over $30 trillion by the 2030s, Sonnenshein highlighted the importance of exploring alternative asset classes.

Understanding the Tokenization of Real-World Assets

The tokenization of real-world assets (RWAs) has emerged as a pivotal concept in the evolving landscape of blockchain finance, capturing the attention of industry leaders and investors alike. Historically, the potential of RWAs was recognized as early as the mid-2010s, with initial projects aimed at leveraging blockchain to enhance transparency and reduce transaction costs. Recent projections suggest that RWAs could surpass $30 trillion by the 2030s, sparking a surge of interest and investment.

At Paris Blockchain Week 2025, the discussion centered on the viability of real estate within this context. While many executives endorsed the $30 trillion estimate, Michael Sonnenshein of Securitize diverged from this optimistic view, arguing against the notion that real estate should lead the tokenization movement. He emphasized a need for liquidity, suggesting that the onchain economy favors more liquid assets. This dialogue reflects a growing recognition that the traditional asset landscape is shifting, making it vital to assess which sectors can truly benefit from the tokenization of real-world assets.

The Future Landscape

As institutions continue to explore RWA tokenization, the debate over its ultimate direction and potential applications underscores the duality between traditional financial systems and emerging blockchain solutions.

Michael Sonnenshein’s Perspective on Tokenization of Real-World Assets

At the recent Paris Blockchain Week, Michael Sonnenshein, the chief operating officer of Securitize, raised eyebrows regarding the tokenization of real-world assets (RWAs), particularly in the real estate sector. During a panel moderated by Gareth Jenkinson of Cointelegraph, Sonnenshein expressed skepticism about the projected growth of RWAs, which many experts claim could exceed $30 trillion by the 2030s. Notably, a June 2024 report by Standard Chartered Bank and Synpulse echoed these sentiments, predicting RWAs may reach over $30 trillion by 2034.

The Demand for More Liquid Assets

Sonnenshein, who previously led Grayscale Investments, argued that while tokenization is vital, the focus should shift away from real estate. He stated, “I don’t think tokenization should have its eyes directly set on real estate,” implying that the existing systems for traditional assets are already effective. He emphasized the need for the industry to prioritize more liquid assets, noting, “What the onchain economy is demanding are more liquid assets."

• Sonnenshein pointed out that despite the efficiencies blockchain can bring to real estate, such as eliminating middlemen, the complexities of ownership don’t align well with current tokenization efforts.
• In the United Arab Emirates, major initiatives like the $1 billion deal between real estate developer Damac and RWA blockchain Mantra aim to link tokenization with real estate, yet Sonnenshein’s perspective offers a counter-narrative.

Ultimately, while Sonnenshein remains optimistic about the evolution of the tokenization of real-world assets, he underscores the necessity of focusing on more liquid alternatives, thus setting the stage for continued discussions in the blockchain finance sector.

Industry Insights on Tokenization of Real-World Assets

The recent comments by Securitize COO Michael Sonnenshein at the Paris Blockchain Week have ignited conversations regarding the tokenization of real-world assets (RWAs) and its implications for the future of finance. While the potential for RWAs to reach over $30 trillion by the 2030s has gained traction, Sonnenshein’s skepticism highlights a critical perspective on the current market landscape.

His argument that real estate may not be the optimal focus for tokenization reflects a broader concern within the industry regarding liquidity. As institutions pivot towards blockchain-based finance, the demand is shifting towards more liquid assets rather than traditionally illiquid holdings like real estate. This could influence not only investment strategies but also the types of assets that will thrive in a tokenized environment.

Moreover, the panel’s diverse opinions suggest that while optimism around RWAs persists, a nuanced understanding of liquidity and asset suitability will be key for stakeholders in the tokenization ecosystem.

As the industry evolves, addressing these complexities will be paramount for fostering investor confidence and developing robust frameworks for the tokenization of real-world assets.