What is tokenization: a turning point in the strategy sought by traditional finance

With the advancement of blockchain technology, tokenization has become a key word in the financial industry. Especially as the growth of the RWA (Real World Assets) market accelerates, a significant gap in understanding has emerged between the crypto industry and traditional financial institutions. It is now time for the entire industry to reconsider what institutional investors, pension funds, and family offices truly seek.

New Possibilities Opened by Tokenization and RWA

Tokenization is a technology that digitizes real-world assets on the blockchain. This allows traditional financial assets such as real estate, bonds, and commodities to be traded and managed more efficiently. The RWA market is gaining attention as a platform for the circulation of these tokenized assets.

In the crypto industry, product development has traditionally focused on the needs of retail traders. Rapid approaches utilizing social media and rapid iteration have been successful, leading to the belief that the same methods could attract institutional investors. However, the reality is different.

Institutional Investors and Retail Traders: Their Needs Are Completely Different

As pointed out by Dean Khan Dillon of RWA.xyz in a survey by NS3.AI, the needs of institutional investors such as pension funds and family offices differ greatly from those of individual traders. What they prioritize are not real-time information delivery or viral content, but compliance, security, and liquidity.

For institutional investors, investment decisions in tokenized assets require a rigorous oversight system comparable to that of traditional financial institutions. Merely stating that “cutting-edge technology is used” is not enough; ensuring reliability and transparency is the top priority.

Challenges in the Crypto Industry: Strategic Shift Is Essential

To realize broader acceptance of tokenization in traditional finance, the crypto sector must fundamentally review its current sales strategies. Customized solutions for institutional investors, strengthened regulatory compliance, and long-term trust-building are indispensable.

Instead of simply applying successful retail market models, a specialized approach tailored to the unique needs of institutional investors will bring true growth to the RWA market. Whether the crypto industry can overcome this challenge depends on the industry’s next steps.