Tokenization is the process of converting ownership rights of an asset into digital tokens that are recorded on a blockchain or similar distributed ledger system. Each token represents a share in the economic value of the underlying asset—whether it’s a financial instrument like a bond or a real world asset like real estate. These tokens can then be traded, transferred, or used in financial applications, creating a digital layer of liquidity and programmability around otherwise static or illiquid assets.

Tokenization results in a system where transactions are not only fast and transparent but also free from traditional paperwork, delays, and middlemen. This infrastructure is what makes tokenized markets fast, scalable, and trustworthy—even for traditionally illiquid assets like residential real estate.

How do Crypto Tokens and RWA Tokens differ?

Digital-native tokens (like Bitcoin or Ethereum) are not backed by physical assets and derive their value largely from supply-demand dynamics and market speculation. 

In contrast, RWA tokens represent tangible or legally recognized value—be it a square foot of real estate, a gram of gold. This distinction fundamentally alters how these tokens are issued, governed, and regulated.

Tokenizing RWAs requires a full stack of trust systems—from legal custodians and trustees to property appraisers and digital notarization layers. Legal ownership is one of the biggest differentiators. In traditional real estate, ownership is tied to physical documents, government records, and manual due diligence. In tokenized real estate, these rights are bundled into digital contracts stored immutably on a blockchain—but the underlying asset still exists in the physical world. Tokenization creates a bridge between the law of the land and blockchain based information of ownership.

How to leverage this technology to make real estate more inclusive in India?

India has 100 million investors in the capital market but only 0.5 million contribute to the real estate market yearly, while it being larger than mutual funds and equities. Tokenization will enable the next 100 million Indian real estate investors to be digital-first—not just for convenience, but because only digital-first platforms can truly democratize property ownership. Tokenization is not just a technology —it is an inclusion engine.

By combining digitized verification layers with micro-ticket real estate ownership, this technology makes one of India’s most aspirational and dependable asset classes available to the masses.

Here’s how this inclusion is achieved:

Digital real estate platforms enable fractional ownership by dividing properties into digitally recorded units with secure blockchain-based ownership. Fully KYC-verified and paperless, they make investing seamless and transparent, allowing people to easily own real estate in cities they live in or feel will give them maximum value. Tokenized real estate has the power to transform and create much more. 

Take the example of Amaravati, a planned city built through voluntary land contributions from farmers, in return for developed plots in the future. However, until those plots are ready, the farmers’ capital remains locked.  Urban investors—say, in Mumbai—could participate in Amaravati’s growth. At the same time, farmers could gain liquidity by selling or pledging a portion of their tokens without losing their long-term stake. 

Tokenization here acts as a catalyst for real estate transformation in India. Bringing in capital from urban India, and unlocking liquidity for rural contributors, along with international and NRI participation without the restriction of geography. We have seen how investments in real estate has cyclical effect on more jobs, better development and value creation for everyone.

What was once out of reach now becomes an accessible, systematic investment avenue. Real estate, once bulky and hyperlocal, becomes portable, divisible, and borderless. This technology could allow smaller investors to participate across cities. 

Digitized Real Estate: A New Layer of Credit

Now consider a user who owns 10 tokens of real estate. Rather than selling, they could pledge the tokens for a loan. Tokenized real estate will generate a data token that merges borrower credibility and token value, allowing institutional lenders to underwrite asset-backed credit—similar to loans against mutual funds.

Tokenization isn’t just unlocking real estate access—it’s building a new financial infrastructure where capital flows freely, ownership is inclusive, and assets become both investable and borrowable for every Indian.

Global push for real estate tokenization 

The global tokenized real estate market is rapidly gaining traction, with estimates suggesting it could exceed $1.5 trillion by 2030 as institutions and platforms embrace fractional ownership and digital trading. Companies like RealT (USA), RedSwan CRE, and Brickblock (Europe) have already tokenized hundreds of millions in residential and commercial properties, enabling global investors to buy fractional real estate assets seamlessly. 

Globally, regulators are actively shaping frameworks to support the rise of tokenized real-world assets. The U.S. SEC treats asset-backed tokens as securities, while Singapore’s MAS has implemented licensing and investor safeguards to govern tokenized offerings. Dubai’s DFSA is piloting real estate tokenization with dedicated market infrastructure, and central banks in Qatar and Saudi Arabia are running tokenization labs to explore national-scale adoption. 

In India, the IFSCA at GIFT City has launched an innovation sandbox for tokenized real estate platforms, enabling live experimentation under regulatory oversight. These learnings are expected to inform broader policy from SEBI, which is considering bringing tokenized assets under its regulatory umbrella—positioning India to lead in responsible, inclusive tokenization.

Asset-backed tokens offer a powerful hedge to equity market volatility, bringing stability, traceability, and real-world backing to investor portfolios. Tokenization could make real estate a more flexible and accessible investment option. This shift allows policymakers and platforms to jointly build long-term wealth infrastructure for middle India, enabling small-ticket, high-trust participation in the country’s most reliable asset class.

Co-Authored by Sanmesh Kalyanpur (Director – Programs and Communications) and Sachin Joshi (Co-Founder Alt DRX)