Stablecoins vs Tokenized RWAs: Who Wins the Long Game?

Two asset classes are racing to become the backbone of on-chain finance. Stablecoins have already won mainstream adoption — over $314 billion in total market cap, processing an estimated $33+ trillion in transaction volume annually. That’s in the league of major global payment networks.

But tokenized real-world assets (RWAs) — bonds, Treasury bills, private credit, real estate — are growing at a pace that’s impossible to ignore. The non-stablecoin RWA market surged from under $1 billion in early 2023 to over $20 billion by early 2026, a gain of over 1,900% in under three years.

So who actually wins the long game? The answer depends on what “winning” means — and for whom.

What Are We Actually Comparing?

Before diving into the battle, it’s worth being precise about what each asset class is.

Stablecoins are tokens pegged to a stable reference value — most commonly the US dollar. They hold their value by backing every token with cash, short-term Treasuries, or algorithmic mechanisms. USDT, USDC, and DAI are the dominant examples. Their superpower is frictionless, near-instant settlement: you can move $1 million across borders in under a second for a fraction of a cent.

Tokenized RWAs are blockchain representations of traditional financial instruments — US Treasuries, money market funds, private credit, real estate, bonds, even gold. Each token represents a claim on an underlying off-chain asset. BlackRock’s BUIDL fund, Franklin Templeton’s BENJI, and Ondo Finance’s OUSG are the flagship examples of what institutional tokenization looks like today.

The critical distinction: stablecoins are designed to not change in value. Tokenized RWAs are designed to generate yield while staying close to stable.

Round 1: Liquidity and Adoption

Winner: Stablecoins — by a landslide.

Stablecoins are already ubiquitous. With market cap exceeding $314 billion and Tether alone commanding nearly 60% dominance, they are integrated into virtually every DeFi protocol, centralized exchange, and cross-border payment corridor. Stablecoin adoption is no longer limited to traders — global surveys show roughly 40% of crypto-native users now receive some portion of their income in stablecoins.

Tokenized RWAs, by contrast, are still largely institutional instruments. Most tokenized assets live in permissioned or semi-permissioned environments where retail participation is restricted by accreditation requirements. According to RWA.xyz, the largest share of tokenized value remains concentrated among institutional holders.

This is the deepest structural advantage stablecoins hold: they work for everyone, everywhere, right now.

Round 2: Yield and Real-World Utility

Winner: Tokenized RWAs — and it’s not close.

This is where the narrative shifts decisively. Stablecoins held in a wallet earn nothing. In a rising interest-rate environment, holding $100,000 in USDC means forfeiting thousands of dollars in annual yield. Stablecoins are, by design, narrow banks that keep your capital static.

Tokenized RWAs solve this problem directly. Tokenized U.S. Treasuries alone have surpassed $10.9 billion in total on-chain value, with products like BlackRock’s BUIDL dominating the category with over 40% market share. RWA TVL grew 210.72% through 2025, climbing from $5.5 billion to over $17 billion as institutional demand for on-chain yield accelerated.

The yield advantage is why tokenized Treasury products surged. Institutional treasuries — including crypto-native protocols like MakerDAO and Aave — are actively replacing stablecoin reserves with tokenized T-bills for exactly this reason.

For any actor holding significant capital on-chain, the question has become: why hold a non-yielding stablecoin when you can hold an on-chain Treasury token with similar stability and real returns?

Round 3: DeFi Composability

Winner: Stablecoins — for now.

DeFi was built around stablecoins. Lending protocols, liquidity pools, automated market makers, perpetuals platforms — every major DeFi primitive assumes stablecoins as the base unit of account.

Tokenized RWAs face a composability gap. Most are issued under KYC/AML frameworks that include transfer restrictions, meaning they can’t flow freely through permissionless DeFi. The smart contract layer and the compliance layer are in direct tension.

That said, this is changing fast. Top RWA protocols like Ondo, Securitize, and Maker are already managing combined TVL exceeding $22 billion, and protocols like Pendle are building infrastructure specifically designed to make yield-bearing RWA tokens composable with DeFi. In a landmark move, BlackRock worked with Securitize to make shares of its tokenized Treasury fund tradable on UniswapX — a concrete signal that the composability wall is coming down.

The composability gap is real, but it is narrowing.

Round 4: Regulatory Clarity

Winner: Tokenized RWAs — by regulatory design.

This is the most underrated factor in the long-term competition.

Stablecoins are under heavy regulatory scrutiny globally. In the US, the GENIUS Act introduced federal rules for stablecoin issuers. In Europe, MiCA became fully applicable in December 2024, creating strict reserve and licensing requirements. The stablecoin landscape is evolving rapidly, with institutional players increasingly demanding regulated, compliant structures — and next-generation models integrating tokenized Treasuries as collateral.

Tokenized RWAs, paradoxically, benefit from more established legal frameworks because they map onto existing asset classes. A tokenized Treasury is still a Treasury — regulators understand how to classify it. Goldman Sachs and BNY Mellon are tokenizing money market funds under existing fund regulations. BlackRock’s BUIDL is registered as an investment fund. These products benefit from decades of legal precedent.

Ripple and Boston Consulting Group forecast tokenized RWAs expanding from approximately $0.6 trillion in 2025 to $18.9 trillion by 2033, implying a CAGR of roughly 53%. That projection assumes regulatory clarity continues to improve — a reasonable assumption given bipartisan momentum in the US and progressive frameworks in Hong Kong, Singapore, and the UAE.

Round 5: Institutional Adoption

Winner: Tokenized RWAs — the institutional bet is already placed.

The most telling signal of where the long game is heading is the identity of who is building. BlackRock, Goldman Sachs, BNY Mellon, JPMorgan, Fidelity, Apollo, Hamilton Lane — these are not crypto-native firms experimenting with buzzwords. These are the largest asset managers in the world, deploying production capital into tokenized instruments.

BlackRock’s BUIDL leads all RWA protocols with over $2.8 billion in TVL, ahead of Maker RWA ($1.29B) and Ethena USDtb ($1.18B).

According to RedStone’s comprehensive Real-World Assets in Onchain Finance report, the tokenized Treasury market alone grew from $100 million in January 2023 to approximately $7.5 billion by mid-2025 — a 7,400% expansion in under three years.

The Emerging Hybrid Model

The binary framing of “stablecoins vs. tokenized RWAs” may itself be outdated. The most compelling development in on-chain finance is the emergence of yield-bearing stablecoins — instruments that combine the liquidity and composability of stablecoins with the yield characteristics of RWAs.

MANTRA’s MANTRA USD is a purpose-built stablecoin for tokenized RWAs, backed by US Treasuries and designed to redistribute yield to network participants rather than capturing it for issuers. Ethena’s USDe generates yield by holding staked ETH and delta-neutral hedges. Mountain Protocol’s USDM passes through US Treasury yield directly to holders.

New stablecoin entrants like Ripple’s RLUSD reached $1 billion market cap in under a year by combining regulatory compliance with enterprise payment utility. The competitive pressure is pushing all major stablecoin issuers toward more structured, yield-aware models.

The winner isn’t stablecoins. The winner isn’t tokenized RWAs. The winner is the architecture that combines both.

Who Wins What — A Framework

Market Outlook

The tokenized RWA market topped $20 billion in early 2026, led by tokenized US Treasuries ($10.9B) and tokenized commodities ($7.3B+). On-chain gold projects including Tether Gold and Paxos Gold have demonstrated resilience during market downturns, with combined TVL exceeding $3 billion, highlighting how tokenized RWAs are increasingly used as hedges rather than speculation vehicles.

Stablecoins, meanwhile, are forecast to grow toward $1 trillion in circulation by late 2026 under bullish scenarios. At those scales, the question stops being “which wins” and starts being “how do they coexist.”

Source: https://blockchainreporter.net/stablecoins-vs-tokenized-rwas-who-wins-the-long-game/