The conversation at Paris Blockchain Week made one point especially clear: putting an asset on-chain does not, by itself, make it liquid. Senior figures from Ondo Finance and Tether argued that tokenization can improve access, transparency and operational efficiency, but it does not eliminate the underlying features that make certain investments hard to trade in the first place.
That distinction matters more now because the tokenized real-world asset market has expanded rapidly over the past year. From about $8.8 billion on April 16, 2025, the sector grew to roughly $29.9 billion by April 16, 2026, a sharp rise that reflects growing institutional interest. Even so, most of that expansion has taken place in assets that were already relatively standardized and easier to distribute, not in the more structurally illiquid corners of private markets.
Why Illiquidity Does Not Disappear on a Blockchain
Panelists stressed that illiquidity is rooted in the nature of the asset itself, not simply in the technology used to record ownership. Real estate and private credit, for example, often involve long holding periods, complex valuation practices and a limited pool of qualified buyers. In those cases, tokenization can modernize the wrapper without changing the economic reality underneath it.
That was the core of the panel’s pushback against one of the most common narratives in the RWA space. A token may make an asset easier to divide, transfer or monitor, but none of that guarantees meaningful secondary demand. In practical terms, better issuance mechanics do not automatically create market depth.
The numbers presented during the discussion reinforced that point. Tokenized real estate rose from $35 million to $296 million year over year, while tokenized private equity increased from $60 million to $223 million. Those gains were notable, but they remained small compared with the broader market’s overall expansion, which was driven largely by products such as tokenized U.S. Treasury exposure and certain commodities that already fit cleaner legal and market structures.
What Actually Builds a Secondary Market
The panel’s more useful message was that sustainable liquidity has to be built deliberately. That means developing distribution channels, attracting market makers, improving custody and settlement systems, standardizing documentation and reducing due-diligence friction for buyers. Without those ingredients, tokenized assets may look tradable on paper while remaining difficult to move in size.
Regulatory clarity was also presented as essential rather than optional. Institutional participants need confidence around compliance, record-keeping, asset provenance and legal enforceability before they commit serious capital to tokenized private-market instruments. In that sense, liquidity depends as much on legal certainty and market structure as it does on software.
The operational implications are immediate for issuers and product teams. Token design has to reflect the transferability, valuation cycle and settlement constraints of the underlying asset, or the result can be a product that appears more fungible than it really is. At the same time, segregated custody, transparent liquidity disclosure and strong record-keeping are becoming central to whether counterparties will trust these products at all.
The broader takeaway from Paris was not anti-tokenization. Speakers were clear that the technology remains valuable as a tool to widen access and streamline processes. But they also made clear that issuance growth should not be mistaken for durable liquidity, especially in asset classes where the underlying constraints remain unchanged. Real secondary markets will only emerge when technology is paired with distribution, infrastructure and regulation strong enough to address the actual causes of illiquidity.