The State of US Tokenization 2026: Market Size, Growth Trajectory, and What Comes Next

Four years ago, the tokenized real-world asset market was a theoretical construct with a handful of pilot programs. Franklin Templeton had recently launched FOBXX on Stellar with a few million dollars in AUM. Figure Technologies was originating tokenized HELOCs in the single-digit billions. Academic papers and industry white papers projecting multi-trillion-dollar tokenization markets were met with polite skepticism from institutional investors who had seen technology promises fail to materialize.

The 2026 state of play is categorically different. Total tokenized real-world assets on public blockchains exceeded $36 billion globally in early 2026. The largest asset manager in the world has a $2.5 billion on-chain money market fund. The largest settlement infrastructure provider in the US processes $384 billion in tokenized repo per day. Every major Wall Street bank has production tokenization infrastructure running with real client volume. The $34 billion in VC investment in blockchain infrastructure during 2025 alone represents an industry’s multi-decade bet on this transition.

This annual state of the market report maps the complete picture: where capital has concentrated, which categories are growing fastest, where the institutional investment is flowing, and — most critically — where the next $100 billion will come from and on what timeline.

The Current Market: A Category-by-Category Breakdown

Understanding the $36 billion tokenized RWA market requires decomposing it by asset category — because the growth dynamics, institutional drivers, and future trajectory vary dramatically across the major segments.

Tokenized Private Credit: $19 Billion — The Largest Category

The largest segment of the tokenized RWA market is also the most surprising to observers who focus on high-profile tokenized Treasury products: private credit, led overwhelmingly by Figure Technologies’ HELOC portfolio on Provenance Blockchain.

Figure’s $15+ billion in tokenized home equity loan origination — the result of building a fully blockchain-native lending operation — represents approximately 80% of the total tokenized private credit market. The remaining $4+ billion comes from Maple Finance’s institutional lending ($2B+), Goldfinch’s emerging market credit ($100M+), Centrifuge’s trade finance and real estate lending ($300M+), and Clearpool’s institutional credit pools ($300M+).

The dominance of Figure’s HELOC portfolio reflects a strategic insight that Figure’s founders identified early: the mortgage origination and securitization market — one of the largest and most operationally inefficient financial markets in the world — was an ideal early application for blockchain-native finance. The per-loan cost reduction from $1,500 to $30 creates a compelling unit economics advantage that drives institutional buyers to prefer Figure’s tokenized HELOC pools over traditional mortgage-backed securities with higher origination costs embedded in the pricing.

The growth trajectory for tokenized private credit is steep. The addressable market — all forms of private credit that could be originated, securitized, and distributed on blockchain infrastructure — encompasses auto loans, credit card receivables, commercial real estate loans, and trade finance instruments collectively totaling tens of trillions. Figure has demonstrated the playbook; incumbents including traditional mortgage servicers, banks, and alternative credit managers are evaluating when and how to adopt it.

Tokenized US Treasuries: $9 Billion — The Fastest Growing Segment

Tokenized US government securities — the segment that receives the most institutional attention and media coverage — represent $9B+ of the total market and have grown faster on a percentage basis than any other category since 2022.

The market structure has consolidated rapidly around a small number of dominant products:

• BlackRock BUIDL: $2.5B+ (Ethereum, Qualified Purchasers only, $5M minimum)
• Franklin Templeton FOBXX: $700M+ (Stellar/Polygon, institutional)
• Ondo Finance OUSG/USDY: $700M+ (Ethereum/multi-chain, various minimums)
• Superstate USTB: $350M+ (Ethereum, institutional)
• Maple Cash: $200M+ (Ethereum, institutional treasury)
• Additional products: $4.5B+ (diverse platforms and managers)

The growth of this category has been driven by the DeFi demand for yield-bearing dollar collateral — a structural need that did not exist before 2022 when interest rates were near zero. When the Fed funds rate rose to 5.25-5.50% in 2023, the opportunity cost of holding idle USDC in DeFi protocols (earning zero) rather than tokenized Treasuries (earning 5%) became impossible to ignore. Ondo Finance’s OUSG attracted hundreds of millions specifically by offering DeFi protocols a drop-in USDC replacement that earns Treasury yield. BUIDL attracted the largest institutional allocations by providing the BlackRock credibility and compliance infrastructure that institutional investment committees require.

The forward trajectory for tokenized Treasuries depends critically on interest rates. At current Fed funds rates of 4.25-4.50% (as of early 2026), the yield premium that tokenized Treasuries offer over stablecoins remains attractive. If rates decline significantly — returning to the near-zero environment of 2021-2022 — the demand for tokenized Treasuries as yield-bearing DeFi collateral will diminish, as the yield advantage over USDC narrows. However, the operational advantages of tokenized Treasuries (T+0 settlement, programmable yield, 24/7 liquidity) will maintain a structural demand even in a lower-rate environment.

Tokenized Equities and Fund Interests: $5 Billion — The Institutional Access Layer

The tokenization of private equity fund interests — specifically, the creation of token-based access to flagship alternative asset manager funds — represents the segment with the most direct implication for wealth management and institutional allocation.

Securitize’s platform has become the dominant infrastructure for this segment, having signed tokenization agreements with KKR, Apollo Global Management, Hamilton Lane, Ares Management, and BlackRock. The collective AUM of these managers runs into the trillions; even modest tokenization of their fund capacity creates a substantial tokenized fund market.

The Hamilton Lane Senior Credit Opportunities Fund tokenized share class, distributed through Securitize, was one of the first flagship alternative manager products to enable qualified individual investors to access a fund previously available only to institutional allocators. The minimum investment through Securitize’s tokenized structure — $20,000 vs. the traditional $1+ million minimum — represents a genuine democratization of alternative asset access, enabled by tokenization’s fractional ownership mechanics.

KKR’s tokenized fund offering via Securitize brought similar access to KKR’s Health Care Strategic Growth Fund II — a private equity strategy previously unavailable to any investor below the $5 million institutional minimum. These tokenized fund products do not change the underlying investment strategy; they change the distribution mechanism, enabling a broader pool of qualified investors to participate.

The growth of this segment is constrained by secondary market liquidity — tokenized PE fund interests trade on Securitize Markets ATS, but volume is thin relative to the primary issuance. As secondary market infrastructure develops, the liquidity premium that alternative asset fund interests currently command will compress, improving risk-adjusted returns for token holders and attracting larger institutional allocations.

Tokenized Real Estate: $2 Billion — The Infrastructure Phase

The tokenized real estate market — $2B+ as of early 2026 — significantly understates the practical scale of blockchain-native real estate finance when Figure Technologies’ HELOC origination is counted as private credit rather than real estate. The $2B figure represents the consumer-facing and institutional-facing tokenized property platforms: RealT, Lofty, Arrived Homes, Harbor/Securitize’s institutional CRE products.

This segment’s growth trajectory is dependent on two developments: IRS guidance on 1031 exchange treatment for tokenized real estate (pending) and institutional-grade custody integration that enables pension funds and endowments to hold tokenized property interests within their existing operational infrastructure. Both developments are expected in the 2026-2027 timeframe, with meaningful AUM acceleration to follow.

The $34 Billion VC Bet

Venture capital flows are a leading indicator for infrastructure build-out timelines — and the $34 billion invested in blockchain and tokenization infrastructure globally in 2025 is the strongest signal yet that the industry’s major investors expect the $36 billion current market to grow by orders of magnitude.

The largest disclosed rounds illustrate where institutional capital is concentrating:

Fireblocks ($550M Series E): The institutional digital asset custody and infrastructure platform that serves 1,800+ institutions, including most major tokenized fund managers. Fireblocks’ valuation — reported at $8 billion post-money — reflects the investor view that institutional crypto/digital asset custody is a durable, high-margin infrastructure business.

Anchorage Digital ($350M Series D): The only nationally chartered digital asset bank in the United States, regulated by the OCC. Anchorage’s bank charter enables it to offer services that non-bank custodians cannot — including direct Fed balance access and FDIC-adjacent stability — making it the preferred custodian for the most conservative institutional clients.

Figure Technologies ($200M Series D): The blockchain-native mortgage originator that has demonstrated $15B+ in tokenized HELOC origination. Figure’s capital raise reflects investor confidence that its model — blockchain-native origination at dramatically lower cost than traditional mortgage processes — can be scaled to adjacent credit products.

Securitize ($47M, with BlackRock leading): The dominant digital securities transfer agent and issuance platform. BlackRock’s direct investment in Securitize — the firm that serves as BUIDL’s transfer agent — creates a strategic alignment that positions Securitize as the preferred infrastructure for the world’s largest asset manager’s tokenization ambitions.

Ondo Finance ($46M): The tokenized Treasury protocol that has built $700M+ in DeFi-integrated on-chain Treasury products. Ondo’s valuation reflects investor belief that the addressable market for yield-bearing tokenized government securities in DeFi is significantly larger than the current AUM.

The geographic concentration of this investment is notable: US companies received approximately 60% of the $34 billion global blockchain/tokenization VC investment in 2025. This domestic concentration reflects both the US market’s dominant position in the global institutional finance industry and the regulatory trajectory that, while still developing, is increasingly conducive to institutional tokenization.

Where the Next $100 Billion Will Come From

The $36 billion current market represents a compelling proof of concept. The path to $100 billion — which, at current growth rates, is achievable by late 2027 or 2028 — will be built on five specific market expansions, each of which is technically feasible now and constrained primarily by regulatory clarity and institutional operational readiness.

1. Municipal Bonds: The $4 Trillion Untapped Market

The US municipal bond market is $4 trillion in outstanding securities, but it is chronically illiquid, opaque, and inaccessible to most individual investors. Municipal bonds trade over-the-counter between broker-dealers, with pricing information that is delayed and often unreliable. The minimum purchase for institutional-quality munis is typically $25,000-$100,000; the transaction costs (dealer markup) can be 1-2% on each trade. Secondary market turnover for most munis is extremely low — many bonds trade only a handful of times per year.

Tokenization addresses each of these problems directly. Fractional muni bonds at $1,000 minimums would open the market to millions of new individual investors. On-chain price transparency would reduce the information asymmetry that costs retail investors billions annually in dealer markup. Programmable coupon payments would automate the semi-annual distributions that current muni bond operations require. T+0 settlement would eliminate the counterparty risk that exists during traditional bond settlement.

The regulatory pathway for tokenized munis exists under current SEC exemptions — munis are generally exempt from registration under the Securities Act’s Section 3(a)(2) exemption for government securities, but the token itself would need careful structuring. Several states, led by Wyoming and Colorado, have enacted blockchain-friendly legislation that provides additional regulatory certainty for digital securities. The first significant tokenized muni bond program — likely a pilot from a large municipal issuer — is expected in 2026-2027, with rapid scaling if the pilot demonstrates market demand.

2. Mortgage-Backed Securities: Improving Settlement for a $12 Trillion Market

The US agency mortgage-backed securities market is approximately $9 trillion outstanding, with the Federal Reserve holding $2.3 trillion following its quantitative easing programs. Non-agency MBS add another $3 trillion. These markets currently settle through TBA (To Be Announced) protocols — complex settlement mechanisms that introduce multiple days of settlement risk and require extensive operational infrastructure.

Tokenized MBS would dramatically simplify settlement: a tokenized mortgage pool would deliver the specific pool of loans at settlement rather than an unspecified pool that meets general parameters, eliminating the TBA convention’s ambiguity. Each loan in the pool would have an on-chain record of its characteristics, payment history, and servicer identity — providing real-time transparency that current paper-based MBS documentation cannot match.

The addressable efficiency gain in the MBS market is enormous. McKinsey has estimated that operational costs in US fixed income settlement total approximately $15-20 billion annually — a significant fraction of which could be reduced through DLT-based settlement. The DTCC’s ongoing exploration of tokenized settlement for fixed income markets positions it as the institutional infrastructure provider for this transition.

3. Private Equity Secondary Markets: $1 Trillion in Trapped Liquidity

The global private equity secondary market — where existing LP interests in PE funds are bought and sold before the fund’s end date — is approximately $130 billion annually in volume against an estimated $1 trillion or more in PE positions that LPs hold but would prefer to sell. The “secondaries” market is constrained by high transaction costs (broker fees of 1-3%), long deal timelines (3-6 months for a standard secondary transaction), and the administrative burden of LP transfer consent processes.

Securitize has already tokenized the primary issuance of several new PE funds — creating a pool of tokenized PE interests that will eventually create secondary market volume on Securitize Markets ATS. The first systematic secondary market for tokenized PE fund interests — where a PE firm’s existing LPs can sell their positions to new investors through an on-chain marketplace rather than through a traditional secondary market broker — would represent a major liquidity event for the private equity asset class.

The regulatory pathway is Reg D, with secondary trading on ATS — the same framework that governs other tokenized alternative fund interests. The constraint is operational: PE firms must consent to LP transfers, verify new LPs’ accreditation and investor suitability, and update their fund records. Tokenization automates the administrative components of this process, but does not eliminate the fund manager’s consent requirement. As fund managers develop operational comfort with blockchain-based LP transfer processes, the secondary market for tokenized PE will develop.

4. Insurance and Annuity Products: The $8 Trillion Opportunity

US insurance companies manage approximately $8 trillion in assets. Life insurance and annuity contracts represent some of the most illiquid financial positions in American households — once a life insurance policy or annuity contract is purchased, it cannot easily be sold, transferred, or used as collateral. Policyholders who need liquidity must surrender their policies at significant penalty or take policy loans at high rates.

Tokenized insurance and annuity contracts would enable secondary market trading in life settlements (already a $4 billion industry) and a peer-to-peer annuity marketplace that does not currently exist. The technical structure — a token representing the right to receive future insurance or annuity payments — is straightforward. The regulatory complexity — insurance is primarily state-regulated, and the SEC’s jurisdiction over tokenized insurance products is uncertain — will require careful structuring.

Several insurtech companies are exploring blockchain-based insurance products, and Bermuda’s insurance regulatory framework has been more welcoming of digital asset insurance structures than most US state regulators. The 2028-2030 timeframe is most realistic for scaled tokenized insurance products in the US market.

5. Trade Finance: The $18 Trillion Global Opportunity

Global trade finance — the credit and payment instruments that support international trade flows — is an $18 trillion market characterized by paper-based documentation, opaque pricing, and chronic underfunding in developing markets. A letter of credit between a US exporter and an Asian buyer typically involves paper documentation that travels between multiple banks and freight companies over days — a process designed for the pre-digital age and unreformed for decades.

Citi Token Services’ integration with Maersk for trade finance settlement is the most prominent institutional signal that blockchain-based trade finance is approaching production viability. The IMF and World Bank have both identified trade finance as a priority application for blockchain technology, given the $1.7 trillion annual trade finance gap in developing economies that constrains economic development.

The US regulatory framework for tokenized trade finance instruments is more complex than for domestic securities — it involves multi-jurisdictional issues of law, the UCC Article 7 treatment of electronic documents of title, and the interplay of US sanctions law with blockchain-based international payment systems. But the efficiency gains are so large — Citi estimates 3-5 day settlement times compressing to same-day — that the commercial incentive is overwhelming once the regulatory framework is clear.

The 2026-2030 Regulatory Outlook

The regulatory environment for US tokenized assets will undergo more change in the 2026-2027 period than in the entire preceding decade — driven by legislation that was years in the making reaching vote thresholds, regulatory leadership turnover that has fundamentally shifted agency posture, and international competitive pressure that makes US inaction increasingly costly.

GENIUS Act stablecoin legislation is the most imminent consequential regulatory event. A bill that passed the Senate Banking Committee is closer to becoming law than any previous stablecoin legislation. Passage in 2026 would provide the regulatory clarity for USDC and bank-issued digital money that institutional treasury departments require before making large-scale stablecoin commitments. The effect on tokenized asset markets would be immediate: the cash leg of every tokenized transaction — currently resting in regulatory ambiguity — would have a clear, federally supervised framework.

FIT21 digital asset market structure legislation — if it clears the Senate and is signed into law — would bifurcate digital asset jurisdiction between the SEC (centralized digital securities) and CFTC (decentralized digital commodities), providing the clearest framework yet for where tokenized real-world assets sit. For institutional investors whose mandate specifies SEC-regulated investments, the classification of tokenized assets as SEC-jurisdiction digital securities would unlock significant new capital.

IRS guidance on tokenized real estate is expected in response to formal requests from the American Bar Association Tax Section and multiple member organizations. A revenue ruling on 1031 exchange treatment for tokenized real estate — expected in 2026-2027 — would remove the largest tax barrier to institutional real estate tokenization.

Continued SEC ATS approvals will expand the secondary market infrastructure that tokenized securities trading requires. The pace of ATS approvals — currently 12+ over six years — is expected to accelerate as the SEC staff becomes more familiar with digital securities ATS applications and as the playbook from existing approvals reduces the review burden.

The ETF Analogy: Why 2026-2028 Is the Inflection Window

The exchange-traded fund analogy deserves more analytical attention than it typically receives in tokenization discussions, because it offers the most compelling historical precedent for how the current market is likely to develop.

The first US ETF — the SPDR S&P 500 ETF (SPY) — launched in January 1993. For the next decade, the ETF industry grew slowly: from $1 billion in 1993 to $150 billion by 2002. The growth was real but insufficient to generate the network effects and institutional adoption that would eventually define the industry. In 2004, the US ETF market was $227 billion — the number this analysis benchmarks against.

Then the inflection: ETF assets doubled every 3-4 years from 2004 to 2020, reaching $5.4 trillion at the decade’s end and $9 trillion today. The inflection was driven by three developments that paralleled what the tokenized asset market is experiencing in 2024-2026: regulatory clarity (SEC exemptive relief enabling new ETF structures), operational standardization (the development of the authorized participant model that made ETF arbitrage reliable), and institutional adoption (pension funds and endowments updating investment policy statements to permit ETF holdings).

The tokenized asset market’s 380% growth from 2022 to 2026 mirrors the ETF market’s trajectory in the 1993-2003 decade — impressive growth from a small base, building the infrastructure and demonstrating the value proposition before the institutional capital flood that follows regulatory and operational maturity. The 2026-2028 period, if regulatory developments proceed as currently projected, is the window most analogous to ETFs’ 2004 inflection.

At current compound annual growth rates — approximately 120-150% per year from 2022 through 2026 — the tokenized asset market reaches $1 trillion between 2027 and 2028. Even at a more conservative 80% CAGR (accounting for the natural deceleration that occurs as markets scale), the market exceeds $200 billion by 2028. At BCG’s projected $16 trillion by 2030, the CAGR from the 2026 baseline must be approximately 90% — high, but not discontinuous with the trajectory already established.

The Intelligence Agenda: What to Watch in 2026

For institutional practitioners who need to monitor this market in real time, the specific developments most likely to move the market in 2026:

Watch: GENIUS Act Senate floor vote timeline and final bill text. The reserve requirements and issuer eligibility provisions will determine whether USDC or a bank consortium controls institutional stablecoin infrastructure.

Watch: First major institutional municipal bond tokenization pilot. When a state or large municipal issuer announces a tokenized bond program — widely expected in 2026 — it will signal the opening of the $4 trillion muni market to tokenization.

Watch: SEC enforcement action (or non-action) on DeFi secondary trading of registered securities. Any formal guidance clarifying whether Aave/BUIDL integration requires ATS registration will have immediate market impact.

Watch: BlackRock BUIDL’s expansion beyond Ethereum. If BUIDL deploys on Avalanche, Solana, or another network — making it accessible to the DeFi ecosystems on those chains — total AUM trajectory will accelerate.

Watch: IRS revenue ruling on tokenized real estate 1031 exchanges. An affirmative ruling would trigger immediate institutional real estate tokenization programs that have been waiting for this clarity.

Watch: First trillion-dollar tokenization program from a sovereign wealth fund or pension fund. When a $300B+ institutional allocator makes a first major tokenized asset allocation — rather than a pilot — it will represent the market’s crossing of the institutional adoption threshold that all subsequent capital follows.

The tokenized asset market in 2026 is at the same inflection point that the ETF market was in 2004, the internet was in 1997, and the mutual fund industry was in 1980. The infrastructure is built. The product is demonstrated. The regulatory framework is developing. The institutional capital is waiting. What remains is time — and the specific regulatory and operational developments that will convert waiting capital into deployed capital at the scale the market is projecting.

For the complete picture of the institutional infrastructure supporting this growth, see our Wall Street tokenization analysis. For the regulatory framework that will determine the pace, see our SEC regulation deep dive. For the most important single product in the market today, see our BlackRock BUIDL analysis.

External authority references: BCG — Relevance of On-Chain Asset Tokenization and IMF — Digital Innovations and the Future of Finance.

Donovan Vanderbilt is the founder of The Vanderbilt Portfolio, an independent intelligence network covering institutional finance and digital asset markets. This analysis is for informational purposes only and does not constitute investment advice.