The Ethereum blockchain’s readiness for real-world asset tokenization came into question recently as experts pointed to security risks, stablecoin concerns, and weak infrastructure.
Pro-crypto lawyer John Deaton pointed to Austin Campbell’s warning on X, noting that these flaws could slow Ethereum’s role in the fast-growing tokenization market.
Security Concerns Over Ethereum’s Infrastructure
Ethereum’s role in the tokenization of real-world assets (RWA) was questioned after fresh concerns from industry voices.
It is worth noting that on August 15, crypto lawyer John E. Deaton shared comments from Austin Campbell.
Campbell is an adjunct professor at New York University (NYU) Stern and the founder of Zero Knowledge Consulting.
He warned that Ethereum may not be ready for large-scale use of real-world assets (RWA).
According to the post, Campbell pointed to the Bybit hack, in which $1.5 billion worth of Ethereum coins were stolen.
He argued that the incident showed weaknesses in Ethereum’s validator system and the limited steps taken to address major exploits.
He said this raised doubts about whether Ethereum could manage the risks tied to issuing tokenized assets at scale.
In addition, Campbell warned about risks with stablecoins like USDC and USDT, which are central to Ethereum.
Additionally, he said if issuers’ private keys were hacked, attackers could control the smart contracts.
Such a breach, he warned, could impact the entire network since most transactions rely on stablecoins for liquidity.
Despite this, Ethereum still leads the tokenization market, holding about 55% of market share.
Yet Campbell stressed that the market size alone did not mean Ethereum was ready for wider adoption.
He pointed to the Multichain hack, where Circle and Tether froze stolen funds, as another example of the ongoing risks.
John Deaton Urges Wider Industry Debate
In a separate post on X, John Deaton, known for his commentary on crypto legal issues, said the concerns should not be ignored.
He quoted Campbell’s remarks online and asked big industry names to respond. He mentioned Tom Lee, Joseph Lubin, Cathie Wood, and Ethereum co-founder Vitalik Buterin.
John Deaton noted that the conversation was timely, as large financial players are beginning to show interest in tokenization.
BlackRock’s CEO, Larry Fink, had spoken repeatedly about the potential of real-world assets.
Other industry leaders, such as Anthony Pompliano, Brad Garlinghouse, and Charles Hoskinson, raised the issue as well.
John Deaton also noted that some lawmakers, such as Senator Elizabeth Warren, remained opposed to digital assets.
He said this made open talks on risks and security even more important for the crypto community.
Vitalik Buterin on Treasuries and Ecosystem Growth
Ethereum co-founder Vitalik Buterin also addressed related issues during an interview with the Bankless podcast.
He discussed how companies holding part of their reserves in Ether could give investors indirect access to the cryptocurrency.
He said this practice created new options for people to engage with Ethereum, which could help strengthen the ecosystem.
Buterin admitted there were risks tied to treasuries firms. He even joked that the United States government was his favorite “treasury company,” referring to times when authorities helped recover stolen Ethereum.
It is important to note that his comments showed the balance between benefits and risks that remained central to Ethereum’s growth.
Notably, as debate around tokenization continues, Ethereum remains a leading player but faces scrutiny about its ability to handle larger adoption demands.
The questions raised by Campbell, and highlighted by Deaton, suggest that more work may be needed before Ethereum can fully support real-world assets on a global scale.
Meanwhile, as of writing this report, the price of ETH, the native digital asset of Ethereum Foundation, was trading at $4,405.53.
The post Is Ethereum Ready for RWA Tokenization? Industry Experts Share Big Take appeared first on The Coin Republic.
Source: https://www.thecoinrepublic.com/2025/08/17/is-ethereum-ready-for-rwa-tokenization-industry-experts-share-big-take/