Why it matters
The pitch for tokenisation has always leaned on liquidity: put a private fund or a bond on a chain, let it trade around the clock, and an instrument that took weeks to sell becomes one that sells in a block. That conflates two things. Continuous availability is a property of infrastructure and is easy to build. Depth is a property of who is willing to warehouse risk, and it has to be paid for.
The distinction decides whether tokenisation changes anything for an allocator. An investor who can only exit by redeeming with the issuer holds an open-ended fund with a settlement upgrade; one who can sell to a third party at a visible price holds something closer to a listed security. Most tokenised assets today are the former.
How it works
Four routes to a secondary price coexist, and they are not substitutes.
A regulated order book is the most conventional. SIX Digital Exchange holds an exchange and a central depository licence in the same entity, so a digital bond can list and settle without leaving the venue. Archax runs an order book and custody stack for tokenised instruments under Financial Conduct Authority permissions. On 23 March 2026 the Securities and Exchange Commission approved a Nasdaq rule change letting members trade Russell 1000 constituents and major index exchange-traded funds in tokenized form on the same book as ordinary shares, with the same execution priority, the same CUSIP and symbol, and the same rights. Tokenisation is a post-trade flag: the participant elects it at order entry, Nasdaq passes the election to The Depository Trust Company, and DTC settles on T+1 under its own rules.
An automated market maker is the second route. A pool holds the token and a stablecoin and prices from a curve without a human. It is the only mechanism that runs continuously, and the one where the quoting party is an anonymous liquidity provider free to withdraw at any time.
A dealer standing as principal is the third, and it is what regulated fund shares have actually got. The SEC's exemptive order to WisdomTree Digital Trust of 23 February 2026 permits covered dealers to buy and sell shares of the WisdomTree Government Money Market Digital Fund on a principal basis at $1.00 per share rather than at the fund's next-calculated net asset value, with relief from Section 22(d) and Rule 22c-1. The intraday market is a broker's inventory, not a book of investor orders.
The fourth route is not a sale at all. Aave's Horizon market takes tokenised Treasury and credit tokens from Superstate, Centrifuge and Circle as collateral against stablecoin borrowing, with risk parameters set by external risk managers and deposits restricted to investors meeting the issuer's own requirements. A holder who needs cash borrows against the position instead of exiting it. That is a financing market, and currently the most reliable source of monetisation for tokenised funds.
Economic mechanism
Someone has to be paid to hold inventory. In a tokenised market that party is one of three: a dealer earning the spread, a liquidity provider earning pool fees against adverse selection, or the issuer absorbing the flow at net asset value. Each has a different failure mode, and the choice determines who bears the loss when the exit is crowded.
The measured evidence is better than the rhetoric on one dimension and worse on another. The ECB's April 2026 study found wholesale tokenised bonds trading with bid-ask spreads 0.05 percentage points tighter than comparable conventional bonds from the same issuers, a reduction of about 27% and significant at the 5% level. On retail-accessible tokenised bonds the sign reversed, on samples too small to carry weight. Tighter quotes on a few wholesale deals held by a few institutions is a real result and a narrow one.
Turnover tells the opposite story about what the trading is for. Kraken reported on 19 February 2026 that xStocks had passed $25bn in total transaction volume across centralised and decentralised venues in under eight months, of which more than $3.5bn was onchain, against roughly $225m of aggregate assets under management and more than 80,000 onchain holders. Volume of a hundred times assets is not investment turnover; it is trading demand from participants who want exposure to a share price inside a crypto account, recycling a small float very fast. Compare tokenised Treasury products, where RWA.xyz showed $16.20bn of distributed value across 85 products held by 62,950 holders on 25 July 2026: an average position of roughly a quarter of a million dollars, and a holder base with no reason to trade at all.
That is the central asymmetry. Where the underlying is volatile and the audience is retail, tokenisation produces enormous turnover on a tiny float. Where the underlying is a cash equivalent held by institutions, it produces almost none, and the useful liquidity is the ability to pledge rather than sell. Designing for the first case and selling to the second is the most common error in the sector.
Participants
Issuers and their transfer agents control who may hold, which caps the buyer pool before any dealer arrives. Exchanges and alternative trading systems supply the book; SIX Digital Exchange, Archax and Nasdaq sit at different points between purpose-built and bolted-on. Market makers and principal dealers supply the quotes, and in the regulated fund case the dealer is frequently affiliated with the sponsor. Lending protocols supply the financing alternative. Depositories remain in the chain: under the SEC staff's no-action letter of 11 December 2025, DTC's records stay determinative for tokenized entitlements.
Examples
Nasdaq's approval of 23 March 2026 is the clearest statement of the conservative design. Tokenised and traditional shares are fungible, share market data treatment, and settle T+1 through DTC. The token is an election about how the entitlement is recorded.
xStocks reached $25bn of cumulative transaction volume by February 2026 on around $225m of assets, across more than 50 venues and wallets on Solana, Ethereum and TON, and not offered in the United States or the United Kingdom.
Aave's Horizon market gave tokenised money market and credit funds an observable financing rate, which for an allocator is a more useful number than a bid nobody is obliged to honour.
Risks and limitations
Liquidity that exists only in benign conditions is the first-order problem. An automated market maker quotes until the pool is drained by informed flow, and an affiliated principal dealer quotes until its own risk limit binds. Neither is a market maker of last resort, and no tokenised venue has been tested through a genuine dash for cash.
Fragmentation cuts against depth by construction. One exposure exists as a tokenised Nasdaq share, a Jersey-issued tracker certificate on Solana, a Robinhood stock token without shareholder rights, and an ordinary share in a brokerage account. Each is a separate pool with a separate legal claim, and they do not net.
The hours themselves are contested. Practitioners promoting continuous trading argue that a market open when Asia is awake is better for a global holder. Custodians, administrators and clearing houses point out that valuation, financing and corporate action processing run on business days, so a Sunday trade prices against a Friday valuation and a Monday reconciliation. Nasdaq and DTC resolved that by keeping T+1 settlement; the WisdomTree order resolved it by fixing the intraday price at $1.00 for a fund whose net asset value is designed not to move.
Finally, thin trading is not obviously a defect. A private credit fund is illiquid because its assets are, and a token allowing fast exit transfers the mismatch to whoever is left.
Key metrics
The honest measures are turnover as a fraction of outstanding value, the number of days on which any trade printed, quoted depth at a stated size rather than best bid and offer, and the spread between the secondary price and the last struck valuation. None is published consistently, which is itself the finding. The series carried here are denominators rather than liquidity measures, and the ratio of reported volume to them is the first thing worth calculating for a new product.
Related research
The ECB's April 2026 bulletin article is the only study to date measuring tokenised bond spreads against a matched conventional sample from the same issuers, and its caution about small retail samples is as useful as its headline. The SEC staff's DTC no-action letter and the Nasdaq approval order show how the largest cash equity market intends to admit tokenisation without changing its trading or settlement model.
The data on this site
The series below are the ones that bear directly on this concept. Each carries its own source, cadence and coverage.
View as table
| Period | Tokenised US Treasury products outstanding | Note |
|---|---|---|
| 2025-12-31 | $9,600,000,000 | End-2025 total as reported by InvestaX's first-quarter 2026 market report citing RWA.xyz, rounded by that source to $9.6bn. |
| 2026-07-22 | $15,860,000,000 | As reported on 23 July 2026 by Crypto Economy citing RWA.xyz, alongside a 3.30% seven-day average yield. |
| 2026-07-25 | $16,200,000,000 | RWA.xyz headline distributed value, rounded by the source to $16.20bn, across 85 products and 62,950 holders at a 3.29% seven-day average yield. |
We hold fewer than two verified observations for this series, so there is no trend to draw. The underlying figures are published by RWA.xyz. Cadence: daily at source; recorded here irregularly. This page will plot them once the history is long enough to mean something.