Abu Dhabi’s Mubadala Capital has entered a partnership with infrastructure provider Kaio to explore on-chain RWAs (real-world assets), signaling a focused institutional push into tokenized private-market investments. The initiative, led by a firm managing more than $30 billion within the broader Mubadala platform, aims to expand investor access, increase liquidity for illiquid holdings and build compliant blockchain infrastructure for institutional deployment.
Institutional tokenization to broaden private-market access
Mubadala Capital’s objectives include broadening the investor base for private-market products by lowering minimum entry thresholds, shifting from conventional institutional ticket sizes around GBP 1 million toward substantially smaller investments illustratively near GBP 50,000 to enable more granular participation. The firm expects tokenization to unlock latent portfolio value by enabling secondary trading and fractional ownership, which could support more agile capital allocation across private equity, private credit and special situations strategies.
Operational benefits focus on efficiency gains from immutable ledger records, reducing administrative overhead and strengthening auditability through on-chain lifecycle tracking of private-market exposures. The engagement intends to develop institutional-grade capabilities such as KYC/AML tooling, secure digital custody and cross-chain interoperability, with networks referenced in partnership discussions including Ethereum, Solana, Algorand and the XRP Ledger as potential settlement or connectivity layers.
Kaio’s role is framed as foundational infrastructure provision, designing compliant issuance, custody and secondary-trading rails that map off-chain legal rights into permissioned on-chain tokens without diminishing institutional control. The collaboration prioritizes interoperability and auditability so that tokenized positions remain compatible with existing legal wrappers, custody structures and fiduciary obligations.
The partnership arrives amid rapid market expansion in RWAs, with tokenization volumes reportedly growing from roughly $8.5 billion in early 2024 to about $33.91 billion by Q2 2025 and total value locked in RWA protocols reaching $65 billion in Q1 2025. Projections referenced by the partners suggest a long-term opportunity in the $16–30 trillion range by 2030–2034, driven by institutional adoption now said to represent a majority share of the emerging market.
The narrative highlights key risks that must be mitigated for institutional credibility, including regulatory fragmentation across jurisdictions, security vulnerabilities evidenced by roughly $14.6 million in RWA-related hacks over a recent twelve-month window and persistent uncertainty around secondary-market depth and liquidity. The announcement links progress to “compliance by design” architectures, robust KYC/AML controls and regulated custody solutions to satisfy institutional risk and governance standards.
Implications for market participants are operational and compliance-centric, as VASPs, custodians and token issuers will need audited processes, proven interoperability and record-keeping aligned with institutional standards before tokenized instruments can meaningfully supplement traditional private-market allocations. The partners highlighted tokenized U.S. Treasuries and private credit as priority asset classes for initial deployment, citing external market references that place tokenized Treasuries in the low-single-digit billions.
The Mubadala Capital–Kaio collaboration is positioned as a deliberate institutional attempt to standardize tokenization infrastructure and broaden private-market access, with ultimate success contingent on demonstrable pilots, clear custody and KYC/AML arrangements and coherent regulatory responses across relevant jurisdictions.