Author: Charitarth Sindhu, Fractional Business & AI Workflow Consultant
We asked eight industry leaders to name the single biggest barrier. Their answers point to a gap that technology alone cannot close.
The law does not recognise what the ledger records
The technology to tokenize real-world assets already exists. In fact, you can mint a token representing a building, a bond, or a barrel of oil in minutes. Yet the global market for tokenized assets sits at roughly $19 billion. As a result, it remains a tiny fraction of the $2 to $30 trillion that McKinsey, BCG, and Standard Chartered project by the early 2030s. So what is blocking the path from pilot to mainstream?
We asked eight founders, CEOs, and enterprise architects one question: What is the single biggest barrier holding back mainstream adoption of real-world asset tokenization? Ultimately, their answers converge on a common theme. The problem is not the blockchain. Instead, the problem is everything around it.
In most countries, transferring a token on a blockchain does not transfer legal ownership of the underlying asset. For example, a token can move in seconds, but the legal title stays exactly where it was. This is what Sudhanshu Dubey calls the “legal-to-ledger” gap. His team at Errna builds enterprise frameworks for tokenized assets, and he points to a hard truth: until a digital signature on a ledger carries the same weight as a notarized deed in court, tokenization will remain stuck in isolated pilots.
“The ‘legal-to-ledger’ gap is what prevents widespread adoption right now. We are looking for a legal solution that will allow contracts, through a transfer of title via the ledger, to have finality. The ability to tokenize assets through technology is established. But in many legal systems, an on-chain token transfer of title cannot establish the transferee/transferor relationship to that asset under existing laws.
According to McKinsey & Company in their 2024 report, the key impediments to growth of institutional solutions for tokenizing real-world assets are the continued lack of legal certainty regarding the binding effect of smart contracts and the legal lack of settlement finality.
In our experience building enterprise frameworks, industry partners have observed that regulatory harmonisation is the ‘boring’ work that gets things done. Until a digital signature on a ledger has the same weight as a notarized deed in a local court of law, there will be no global standard for liquidity. There will only be isolated pilot projects.
While tokenization promises greater access to capital, without a cohesive legal standard there will only be digital silos for capital. The industry should move beyond technical hype and consider how legacy legal constructs can be reconciled to distributed ledger technology in order to establish the necessary level of trust within capital markets.”
- Sudhanshu Dubey, Delivery Manager and Enterprise Solutions Architect, Errna
Similarly, Igor Golovko sees the same gap from the engineering side. His team at TwinCore builds developer tools for tokenized systems, and as a result, they run into the problem at every layer of the stack.
“A major barrier is the lack of reliable, standardized proof of ownership and enforceability between the on-chain token and the off-chain asset. In practice, you can mint a token in minutes. But if the legal structure, custody, lien status, and transfer rights are not clearly mapped and auditable, institutions cannot treat it as a true representation of the asset, especially across jurisdictions.
From an engineering standpoint, we see this show up as integration and data-governance gaps. Registries and custodians expose inconsistent APIs. Identity and AML requirements vary. There is no common schema for the asset’s lifecycle events, from issuance to servicing to corporate actions. Until those off-chain systems and legal frameworks are standardized, tokenization stays stuck in pilots rather than production-scale workflows.”
- Igor Golovko, Developer and Founder, TwinCore
Only a handful of jurisdictions have started closing this gap. For instance, Switzerland’s DLT Act gives ledger-based securities the same legal standing as paper certificates. Likewise, Liechtenstein’s Token Act treats tokens as legal containers for virtually any right. Meanwhile, Germany’s Electronic Securities Act allows bonds and shares to exist without paper. However, these remain exceptions. Most of the world still requires physical documents, government registries, and notarized paperwork to transfer property.
Every country plays by different rules
Even where regulation exists, it varies wildly from one market to the next. The EU has MiCA for crypto assets, but it explicitly excludes tokenized securities from its scope. In contrast, the US passed its first federal stablecoin law in 2025 yet still lacks a unified classification framework for tokenized assets. Meanwhile, Singapore runs sandbox programs with over 40 financial institutions, while the UAE has begun legalizing RWA token issuance directly. In other words, no two countries agree on what a tokenized asset is or how it should be regulated.
Because of this fragmentation, anyone trying to build at scale faces real operational problems.
“One major barrier to mainstream adoption is fragmented standards across platforms, custodians, and settlement processes. When each participant uses different rules for identity, ownership records, and transfer procedures, it becomes hard to integrate tokenized assets into existing operations. That fragmentation increases operational complexity and makes it difficult to scale beyond pilot programs. Until the market aligns on consistent rails for how these assets are issued, moved, and reconciled, adoption will remain uneven.”
- Aman Anand, Co-Founder, Nvestiq
“The biggest barrier to mainstream adoption is regulatory uncertainty. While the technology itself is promising, the lack of clear legal frameworks around digital ownership and tokenized assets slows investor confidence. Until governments define how tokens are treated in terms of taxes, ownership, and compliance, widespread adoption remains a challenge.”
- Karina Tynchenko, CEO and Co-Founder, Brandualist Inc.
Furthermore, Logan Benjamin draws a parallel from his experience running operations at PuroClean. In his view, clear guidelines build trust in any industry, whether that industry is water damage restoration or digital finance.
“A major barrier holding back mainstream adoption is the lack of regulatory clarity. Without clear legal frameworks, investors and institutions remain hesitant to fully embrace tokenized assets. From my experience at PuroClean, understanding how essential clear guidelines are in operations, whether for insurance or customer service, shows that regulatory certainty can build trust and drive adoption. Tokenization, much like the water damage restoration industry, thrives when supported by robust, transparent systems that reassure all stakeholders. Until these regulatory frameworks are in place, mass adoption will continue to face delays.”
- Logan Benjamin, Co-Founder, PuroClean
Additionally, Hasan Can Soygök deals with cross-border regulatory friction every day at Remotify, where his platform handles payments and compliance across multiple countries. Because of this experience, he sees tokenized assets facing the same structural problem, only worse.
“The biggest barrier is that every country treats tokenized assets differently. I build products that handle cross-border payments and compliance, and the same problem exists there. A payment method that is legal and straightforward in Germany might require three extra steps in Turkey and be completely unavailable in another market. Tokenized assets face the same fragmentation but worse, because property law is even more localized than payment regulation. Until there is a shared framework that lets a tokenized asset move across borders without needing a new legal wrapper in every jurisdiction, adoption will stay limited to single-market pilots. The technology is ready. The legal infrastructure is not.”
- Hasan Can Soygök, Founder, Remotify
The speed gap and the standards gap
Beyond legal and regulatory barriers, there is also a practical mismatch between how fast tokens move and how slowly the real world settles. For example, a blockchain transaction can clear in seconds. However, US securities only moved to next-day settlement in May 2024. In addition, real estate transfers take 30 to 180 days. As a result, corporate actions processing costs more than $58 billion a year globally, and nearly half of all event data is still published and received manually.
Vaibhav Kakkar points out that because of this speed gap, most institutions face operational risk they will not accept.
“A major barrier is the mismatch between token settlement speed and real-world settlement delays. A token can move in seconds but the underlying asset often cannot. For example, land registries update at their own pace and loan servicing cycles take place monthly. Corporate actions involve paperwork and can take time, creating operational risk that many institutions will not accept.
To fix this, tokenization should be designed around the slowest critical step. The workflows need to reflect how assets settle and how disputes are resolved. Synchronized record-keeping between the token ledger and the authoritative registry is key. When settlement expectations align with reality, trust increases, and adoption follows.”
This settlement mismatch also connects to a broader standardization problem. Specifically, registries and custodians use different APIs, while identity and anti-money-laundering requirements change from one platform to the next. On top of that, there is no shared schema for tracking how a tokenized asset moves through its lifecycle, from issuance to servicing to redemption.
Still, industry efforts are underway. For instance, the ERC-3643 token standard embeds compliance checks at the smart contract level. In addition, Swift ran its first end-to-end tokenized bond lifecycle trial in late 2025, and DTCC received regulatory approval to pilot tokenized entitlements for major US stocks and Treasuries. Nevertheless, these remain early steps, not finished infrastructure.
The trust problem is a language problem
Technology barriers will eventually fall. Similarly, legal frameworks will slowly adapt. But there is also a quieter barrier that several respondents raised: most people still do not understand what tokenization means or why it matters.
Callum Gracie runs an SEO agency and works with business owners across industries. As a result of that experience, he argues that the biggest adoption barrier is not legal or technical. Instead, it is linguistic.
“The barrier is trust, and trust comes from understanding. Most business owners I work with have never heard of asset tokenization. When they do hear about it, the language sounds like it was designed to keep them out. The industry talks about settlement finality, smart contract enforceability, and DLT frameworks. None of that means anything to someone deciding whether to put money into a tokenized property or fund. If you cannot explain what someone owns and how they prove it in plain language, you do not have an adoption problem. You have a communication problem. The platforms that win will be the ones that make tokenized ownership feel as simple and trustworthy as a property title or a share certificate.”
- Callum Gracie, Founder, Gia AI
He has a point. In fact, McKinsey’s 2024 report identified a “cold start problem” where limited adoption discourages new participants from entering the market. Part of that cold start is simply that the language of tokenization keeps ordinary investors and business owners on the sidelines.
Ultimately, the path to mainstream tokenization runs through courtrooms, parliaments, and standards bodies, not just server rooms. The experts we spoke to agree on one thing: the technology is ready. However, the institutions around it are not. How fast that changes will determine whether tokenized assets reach $2 trillion or $30 trillion by the end of this decade.