Market Size and Current Growth Metrics
As of March 2025, tokenized Real World Assets (RWAs) have reached $20 billion in total value locked (TVL), with private credit dominating at $11.9 billion – representing nearly 60% of all tokenized assets. This market has doubled in just twelve months despite broader crypto market fluctuations, demonstrating the sector’s resilience and accelerating institutional adoption.
The traditional private credit market has expanded to approximately $1.5 trillion, with Moody’s projecting growth to $3 trillion by 2028. Tokenized assets currently represent less than 1% of this total addressable market, indicating substantial growth runway.
Performance Metrics Driving Adoption
Direct lending within private credit currently generates 10-year annualized returns of 8.8%, significantly outperforming traditional credit markets – investment-grade corporate bonds (1.4%), leveraged loans (4.1%), and high-yield bonds (4.1%). These superior returns are driving capital inflows and institutional engagement with blockchain-based credit platforms.
Current Institutional Developments
- DigiFT’s partnership with Invesco USA: Launching a platform for tokenized senior secured loans with daily liquidity specifically for accredited investors
- BlackRock’s BUIDL fund: Reaching $1 billion in tokenized treasury assets
- Circle’s acquisition of Hashnote: Strategic positioning in the tokenized money market fund space
- Kadena’s $25 million RWA Grant Program: Accelerating development of tokenized RWA solutions on their proof-of-work blockchain.
Evolution of Bank-Private Credit Partnerships
Bank-private credit partnerships have transformed in 2025, with jointly marketed platforms and full joint ventures now dominating. Major implementations include:
- Apollo & Citigroup’s $25B collaboration: Combining Citi’s banking network with Apollo’s credit platform for middle-market lending
- JPMorgan’s multi-platform approach: $10B+ ecosystem spanning middle-market, lower middle-market, and large-cap direct lending
- BNP Paribas & Apollo’s $5B ESG fund: Targeting renewable energy and green infrastructure
Banks now generate 18-22% of revenue through these partnerships (up from 9% in 2023) while maintaining client relationships. Private credit funds gain access to deal flow for deploying their substantial capital reserves. Both sides benefit: banks participate in higher returns without balance sheet strain, while credit funds secure origination channels in an increasingly competitive market.
Emerging Asset Classes
Beyond traditional debt instruments, new asset classes are gaining traction in the tokenized space:
- Sustainable assets: Renewable energy projects and carbon credits with improved impact tracking
- Residential mortgages: Being shifted off bank balance sheets into tokenized vehicles
- Higher-risk commercial real estate: Finding new liquidity through tokenization platforms
- Asset-backed finance: Auto loans, aircraft leasing, and student loan portfolios moving on-chain
Liquidity Solutions Addressing Key Barriers
Recent surveys show 70% of wealth and asset managers would allocate more to private credit if not for liquidity constraints. Current tokenization solutions directly address this through:
- Fractionalization enabling smaller investment minimums
- Secondary market infrastructure improving trading capabilities
- Digital marketplaces connecting global buyers and sellers
- Standardized contract terms
Regulatory Landscape and Institutional Adoption
The tokenized private credit growth trajectory is increasingly influenced by regulatory developments across jurisdictions. Institutional adoption remains uneven, with forward-thinking firms taking leadership positions while others maintain a cautious stance.
The sector’s continued expansion through 2025 will depend on regulatory frameworks providing sufficient clarity without imposing excessive compliance burdens that might inhibit innovation in this rapidly evolving market segment.