RWA Market Hits $24B, Hong Kong Aims for Digital Asset Lead

The convergence of regulatory clarity and blockchain innovation is taking center stage in 2025, as two major developments signal a maturing digital asset ecosystem. A new report shows the tokenized real-world asset market has expanded to $24 billion, with private credit emerging as the dominant asset class. Simultaneously, Hong Kong’s government has unveiled its second major policy statement on digital assets, reinforcing its commitment to building a globally competitive, well-regulated crypto and tokenization hub.

Tokenized Private Credit Surpasses Treasuries as RWA Market Booms to $24B

The tokenized real-world asset (RWA) market is entering a new phase of growth and institutional legitimacy, according to RedStone’s H1 2025 RWA Market Overview report, co-authored with decentralized finance (DeFi) protocol Gauntlet and the data analytics platform RWA.xyz. Once a niche corner of the blockchain ecosystem, RWAs have evolved into a $24 billion market, excluding stablecoins, as tokenization expands from public debt products into the lucrative world of private credit.

The growth in tokenized private credit (Source: RWA.xyz)

The report highlights that tokenized RWAs have surged by 380% since 2022, with private credit now taking center stage. In a marked shift from earlier narratives focused on tokenized Treasury bills, private credit assets now make up more than half of the market—amounting to $14 billion as of mid-2025.

Private Credit Becomes the Cornerstone of Tokenized Finance

Private credit, also known as direct lending, has historically been a high-yield investment strategy reserved for institutional players. Now, thanks to blockchain-enabled tokenization, access to this yield-bearing asset class is being democratized. Investors can now tap into yields ranging from 8% to 12% through tokenized products such as Apollo Global Management’s ACRED fund, which exemplifies the programmable, yield-focused structure that tokenization enables.

According to FS Investments, private credit’s appeal lies in its “yield premium” over traditional public debt instruments. The RedStone report emphasizes that tokenization is enhancing the appeal even further by significantly improving settlement speed, liquidity, and accessibility — all while enabling fractional participation in assets that were once out of reach for most market participants.

These advantages represent a transformational upgrade to a traditionally opaque and illiquid segment of the credit market.

Ethereum Remains the Institutional Stronghold

Ethereum remains the dominant force in the RWA tokenization space despite increasing competition from newer, high-performance blockchains. As of June 2025, Ethereum hosted approximately $7.5 billion worth of tokenized RWAs across 335 individual products — accounting for 59% of the entire market.

Ethereum the “institutional standard” for housing most of the RWA activity (Source: RedStone)

“While Ethereum’s decentralized governance has historically limited its institutional outreach,” the report states, “the launch of Etherealize in January 2025 marked a strategic pivot.” The Ethereum Foundation’s Etherealize campaign was created to attract more institutional players to on-chain finance and has since become a cornerstone of Ethereum’s renewed dominance in RWA infrastructure.

Ethereum has earned its title as the “institutional standard” for tokenized RWAs, especially as firms continue to prefer its security, composability, and extensive tooling.

Though Ethereum still leads, other blockchain networks are rapidly gaining ground in specific RWA niches. Solana, hailed in the report as a “high-performance challenger,” has become an emerging hub for tokenized Treasury bills, now hosting around $351 million in tokenized assets.

Similarly, Aptos has grown into a formidable player with $349 million in tokenized assets. Notably, BlackRock’s BUIDL fund, which debuted earlier this year, was deployed on Aptos — making it the first major fund launched on a non-Ethereum Virtual Machine (EVM) chain.

Avalanche and XRP Ledger are also carving out distinct roles. Avalanche, which hosts $188 million in RWAs, is home to the tokenized version of a KKR fund. Meanwhile, XRP Ledger has been dubbed a “regulated newcomer” with $157 million in tokenized assets and growing interest from fintech firms seeking compliance-first blockchain solutions.

The Big Picture: A Programmable Yield Economy

The rise of tokenized private credit represents a broader shift toward a programmable yield economy, where yields are not just passively earned but algorithmically managed and transparently distributed via smart contracts.

This trend is also contributing to a reconfiguration of traditional financial rails, where capital formation and settlement are increasingly happening on-chain, with minimal intermediaries and faster turnaround times.

As RedStone’s report concludes, the ongoing transformation of RWAs is not just a blockchain use case — it’s a financial revolution in motion. The convergence of DeFi architecture with real-world investment products is opening new paths for liquidity, participation, and performance in a global capital market that increasingly values speed, transparency, and programmability.

Hong Kong Reinforces Digital Asset Strategy with Second Policy Statement, Sets Sights on Global Crypto Leadership

In related news, the Hong Kong government has released its second major policy statement on the sector, unveiling a forward-looking regulatory framework that places investor protection and risk management at its core. The announcement marks a significant step in the region’s continued efforts to attract blockchain-based innovation and institutional adoption while maintaining market integrity.

The new framework, outlined on Thursday, will be implemented and overseen by the Securities and Futures Commission (SFC) and will apply to a broad range of market participants including custodians, exchanges, stablecoin issuers, and other digital asset service providers. The government plans to initiate public consultations on these upcoming licensing regimes shortly, aiming to foster transparency and inclusivity in regulatory development.

Regulatory Clarity and Market Confidence

The framework is designed to provide legal clarity for operators in the space while offering safeguards that mitigate the kinds of market instability and consumer harm witnessed in unregulated jurisdictions. By requiring clear licensing standards and operational safeguards, the city hopes to bolster investor confidence and draw reputable global players to its shores.

The statement expands on a 2022 declaration in which Hong Kong signaled its intent to engage with the crypto industry. Since then, the government has taken concrete steps, including the licensing of four cryptocurrency exchanges in December and the recent passage of a law enabling the regulation of stablecoin issuers from Aug. 1, 2025.

Alongside digital asset regulation, Hong Kong is now turning its attention to the rapidly emerging field of real-world asset (RWA) tokenization — the process of issuing digital representations of traditional financial instruments like bonds and securities on blockchain networks.

The Financial Services and the Treasury Bureau (FSTB), in collaboration with the Hong Kong Monetary Authority (HKMA), will launch a comprehensive review of existing laws governing tokenized RWAs and financial instruments. 

Competing Globally on Regulation

Hong Kong’s proactive stance places it among a growing list of jurisdictions vying to regulate digital assets with clear and enforceable laws. The European Union’s Markets in Crypto-Assets (MiCA) legislation took effect last year, offering a comprehensive rulebook for crypto businesses. Similarly, the United States, United Kingdom, South Korea, and Pakistan are also building out tailored regulatory regimes to capture the crypto sector’s growth potential.

In this context, Hong Kong’s policies could offer a compelling alternative for crypto firms seeking a well-regulated yet innovation-friendly environment. Its strategic location, robust financial infrastructure, and growing emphasis on digital finance make it a natural contender for Asia’s crypto capital.