The real-world asset tokenization market has reached 25 to 36 billion dollars! A complete strategy for financial institutions to seize the opportunity abroad.

Written by: Tiger Research

Translated by: AididiaoJP, Foresight News

A latest in-depth report released by Tiger Research points out that the real-world asset tokenization market is growing rapidly, but many jurisdictions still lack a comprehensive regulatory framework. Local financial institutions must make strategic choices between waiting for national legislation, using regulatory sandboxes for limited experiments, or being the first to enter mature markets abroad.

Before officially entering, institutions must make thorough preparations in six core areas, including jurisdiction selection, license acquisition, asset definition, target investor scope, and the design of settlement mechanisms and operational arrangements. The core objective is to accumulate real operational experience as quickly as possible by choosing a path that best suits their circumstances. There are mainly two paths: entering jurisdictions with established regulations directly or adopting the technical route of on-chain native platforms.

Wait, Experiment, or Go Abroad?

As of the first half of 2026, the real-world asset tokenization market size has reached approximately 25 to 36 billion dollars. This market has achieved significant efficiency improvements through tokenization — including automated interest payments and redemptions, shortened settlement cycles, and an expanded customer base — thus attracting considerable attention from institutional investors.

However, financial institutions still face actual barriers due to the regulatory void. Although there is currently no explicit ban on tokenization, to obtain legally binding effects from distributed ledger records, the relevant legal frameworks are still inadequate, and investors' rights are not sufficiently protected. Against this backdrop, financial institutions commonly adopt three strategies:

• Waiting for domestic legislation: This approach is beneficial for risk management, but may miss opportunities to seize early market share.
• Using regulatory sandboxes: This allows for limited experimentation, but is usually restricted to small-scale scenarios such as fractional investments, making it difficult to extend to standardized securities issuance.
• Being the first to enter overseas markets: Issuing digital bonds in jurisdictions with established regulations, accumulating performance and track record abroad to build competitive advantages.

Since real-world asset business is essentially a global business, financial institutions need to accumulate operational capabilities in different regulatory environments. For jurisdictions where regulations are not yet complete, institutions have even more reason to proactively accumulate practical experience in overseas markets to stay ahead of peers.

Tokenization is Not Magic

International real-world asset operations are not the result of isolated decisions but a series of interconnected choices. Tokenization is not magic; it is a process of migrating existing financial instruments to a new infrastructure, which requires more precision than traditional issuance, not less.

Before deciding to enter, institutions should honestly assess their level of preparation in the following six areas:

• Establishing an offshore base: Determine how to utilize key jurisdictions such as Hong Kong, Singapore, or the United States, whether through existing entities, setting up new entities, or partnering with local companies. New entities have stronger control but require substantial resource investment; collaboration can allow for quicker entry, but limits the extent of internalizing core capabilities.
• License acquisition: Meet the licensing requirements of the target selling jurisdiction. Options include direct application (time-consuming and costly) or leveraging the licenses of existing platforms (quicker but requires adhering to platform specifications for the issuance structure).
• Asset definition: The type of assets chosen for tokenization determines the entry threshold. Standard securities such as bond structures are mature and relatively easy to implement; however, non-standard assets such as real estate or trade receivables require more time for legal review and structural design.
• Target investor scope: Typically, the strategy targets all jurisdictions except the United States. Selling to non-U.S. investors can rely on Regulation S offshore exemptions; if U.S. investors are included, additional requirements such as Regulation D must be met, increasing structural complexity. Additionally, many security token offerings (STOs) and real-world asset platforms are limited to qualified or institutional investors, thus the sales strategy must be determined in conjunction with the investor scope.
• Settlement currency and payment process: Decide whether to accept local currency, U.S. dollars, stablecoins, or wholesale central bank digital currencies for settlement. This involves not only currency selection but also directly affects investor accessibility, custody structure, and final revenue. For example, accepting stablecoins will introduce conversion requirements and potential additional costs.
• Other operational requirements: Depending on the structure, considerations also include blockchain selection, custody, on-chain operations, and post-issuance governance. In particular, clarifying who controls interest payments and redemptions, record management, and the ability to forcibly transfer or freeze tokens in the event of incidents, all of which are similar to traditional financial instruments' operational requirements.

Even after the structural design is complete, the work is not finished — the securities must be successfully sold and find investors.

Choosing an Operating Location

Jurisdiction selection is a strategic decision that requires weighing regulatory compatibility and operational efficiency simultaneously.

For institutions with existing offshore presence, the most efficient starting point is to first assess the current jurisdiction. If the primary goal of the offshore tokenization strategy is to accumulate practical experience as early as possible, establishing a new jurisdiction base comes with high time and financial thresholds.

• Hong Kong: Leading in regulatory completeness and enforceability. Security tokens are regulated under the existing Securities and Futures Ordinance framework, and in April 2026, the SEC allowed secondary trading on licensed virtual asset exchanges, completing the loop of issuance and distribution. Infrastructure such as HSBC Orion has been put into operation, with strong policy support, including the Monetary Authority’s subsidies for issuance costs. However, it is worth noting that if the legislation introducing new virtual asset dealers and custody licenses in 2026 proceeds as planned, compliance issues regarding transitional provisions merit attention.
• Singapore: Precise framework, clear regulation. Singapore strictly adheres to the principle of "same activity, same risk, same regulation," with the Monetary Authority revising tokenization guidelines in December 2025 to provide clearer guidance. The Variable Capital Company (VCC) structure facilitates asset segregation and is suitable for fund setup. However, even for offshore client business, license requirements are stringent, resulting in a higher entry threshold.
• The United States: Clear regulation, efficient market pathways. In 2026, the SEC and the Commodity Futures Trading Commission jointly clarified the asset classification framework. The cost of obtaining a license directly as an issuer is high, but operating through vertically integrated platforms like Securitize can efficiently leverage Regulation D (for qualified U.S. investors) and Regulation S (for offshore investors) exemptions. BlackRock's BUIDL fund is a typical case of this path.

Each jurisdiction has mature platforms to accelerate local entry. These licensed operators provide regulatory coordination, a network of fundraising investors within the platform, and operational infrastructure for the entire lifecycle from issuance to settlement. When evaluating entry into specific jurisdictions, meeting with local leading platforms to test business viability is more efficient than reading large volumes of regulatory documents first.

Bypassing Jurisdictional Restrictions with On-Chain Native Paths

The previous section discussed the direct method of establishing a legal and entity presence in specific jurisdictions and obtaining necessary licenses. This section introduces a fundamentally different approach: the on-chain native path, designed from the outset around the on-chain environment for issuing and distributing.

This method does not require substantial time and financial investment to establish an entity base but instead leverages existing on-chain platforms with built-in regulatory compliance features to lower market entry barriers. The jurisdiction path asks "where will we operate," while the on-chain native path asks "how will we construct the transaction."

Typical examples include:

• Ondo Global: Tokenizing U.S. securities through a bankruptcy-isolated special purpose vehicle (SPV) registered in the British Virgin Islands, using Regulation S offshore exemptions to reduce friction with U.S. securities regulations. It also operates its secondary market, Ondo Global Markets, which directly handles the trading of issued tokens.
• Plume Nest: Plume's Bermuda subsidiary KDAB holds a Class M DABA license from the Bermuda Monetary Authority, operating a regulated on-chain vault. The Plume Nest platform is accessible only to investors who pass KYB and KYC screenings, while its affiliated company's SEC transfer agent registration provides additional assurance for ownership registration and distribution. Due to the decentralized design of the platform, tokenization outside the licensed structure is also possible, but this path is less suitable for regulated financial institutions.

The on-chain native strategy is essentially similar to jurisdiction-based tokenization, but the execution methods differ significantly. The main advantages are fast entry and broad coverage: institutions do not need to be tied to specific bases and can leverage validated infrastructure for quicker market entry. Another advantage is that, unlike jurisdictional platforms' closed ecosystems that might limit secondary market liquidity, on-chain native platforms built around scalability can naturally connect to DeFi liquidity pools.

However, the complexity of structural design is a risk that needs to be weighed. The openness of these platforms allows for a wider range of product types, but in core structural decisions (such as issuance design), they lack the existing regulatory guidance that direct jurisdiction paths provide. Since different platforms adopt varying structures, it may also impose operational burdens on traditional financial institutions, making it worthwhile to assess whether there are local connections for that platform in the target region.

Do Not Wait for Regulation; the Market Will Not Wait

Large U.S. financial institutions have been leading the market, either building proprietary platforms or accumulating direct experience on networks like Canton, Solana, and Ethereum.

For financial institutions in jurisdictions where regulations are not yet complete, conducting offshore real-world asset business requires redesigning the entire local value chain, from establishing a base to distribution. The preparation period typically takes six months to over a year. The report uses a medium-sized securities company, "Company A" (which already has a Hong Kong entity), as an example to detail the process of tokenizing short-term investment-grade bonds for offshore institutional investors:

• Step 1: Evaluate the status of the existing base and licenses. Utilize the existing Hong Kong subsidiary to avoid the time and cost of establishing a new entity. Legal advisors review the current authorization scope and, if necessary, conduct preliminary consultations with regulators (such as the Hong Kong SEC) to confirm whether changes to licensing conditions or additional filings are needed.
• Step 2: Select platforms and infrastructure. To reduce the time for directly applying for licenses, consider operating through established platforms like DigiFT. Due diligence covers the validity of platform licenses, supported asset ranges, custodial partners, and investor restrictions. Legal reviews during the contract stage address issuance structure design to comply with platform specifications, allocation of responsibilities, and governing laws.
• Step 3: Regulatory compliance and product design. Finalize the product structure of the bonds to be tokenized, including underlying assets, investor rights, and governing laws. The standard practice is to target offshore institutional investors outside the United States using Regulation S exemptions. Legal opinions are needed on compliance with local securities laws in each target jurisdiction and to verify whether the logic for excluding local residents is reasonable under securities laws before proceeding to draft and approve the offering documents.
• Step 4: Design custodial structure and on-chain operations. Establish a dual custody arrangement: a global custodian bank for physical assets and specialized infrastructure for on-chain tokens. Obtain legal opinions from external attorneys. Meanwhile, finalize operational details including interest payment schedules, settlement currencies (U.S. dollars or stablecoins), and redemption mechanisms.
• Step 5: Issuance, execution, and verification. Execute the actual issuance and sales according to the final structure and confirm that operating procedures such as interest payments and redemptions function as designed. Structural design is just the starting point; the business is only considered complete once investors are secured and sales are finalized.

This offshore tokenization strategy is not limited to direct pathways of establishing bases in specific jurisdictions. Flexible methods like on-chain native paths that bypass jurisdictional boundaries make the selection of viable pathways effectively open.

In any path, legal review is the most time-consuming and costly barrier. However, waiting for a complete regulatory framework is not the only answer. Quickly planning viable pathways and accumulating experience through execution is more important than anything else, as the essence of tokenization business lies not in technological design but in completing the entire sales process.

No one can predict when regulation will finally land, and the market will not wait. Now is the time to act.