Tokenized Assets Face Growing Pains as Supply Outpaces Demand, Industry Leaders Warn at Singapore Summit

Tokenized assets are rapidly opening up fresh trading opportunities across global financial markets, yet the accelerating supply of real-world assets (RWAs) being brought onchain has not been matched by corresponding investor demand. This mismatch poses a significant hurdle for market participants navigating an evolving digital economy, according to insights shared by industry executives.

Speaking during a panel discussion on liquidity and market fragmentation at the CONNECT by Cointelegraph: Singapore Edition event on Oct. 9, Alex Taaffe, chief revenue officer at prominent crypto trading firm GSR, detailed the current state of onchain capital formation. Taaffe noted that while liquidity is visibly improving in trading sectors for pre-IPO stocks, commodities, and global equities—asset classes that retail and institutional investors previously struggled to access—demand for fully tokenized RWAs has failed to keep pace with the massive wave of new issuances.

The Cointelegraph-hosted event brought together a wide array of Web3 founders, institutional investors, and seasoned industry executives for four comprehensive panel discussions. These conversations tackled pressing topics including asset tokenization, stablecoin payments, modern onchain trading infrastructure, and venture capital exit strategies, alongside a competitive startup pitch showcase.

Addressing the structural imbalance in the market, Taaffe emphasized that the issue lies squarely in the disconnect between issuers and buyers. Specifically focusing on RWAs and fully tokenized assets, he pointed out that a pronounced supply and demand imbalance currently plagues the sector. Every traditional asset manager and token issuer seemingly wants to execute capital formation directly onchain, creating a glut of supply. He added that the proliferation of numerous asset issuers and a fractured landscape of disparate blockchains have only served to further divide and fragment liquidity across tokenized markets globally.

Lingling Jiang, a partner at DWF Labs, echoed these sentiments during the panel, agreeing that market fragmentation remains a persistent challenge for the industry. Jiang noted that the problem is particularly acute when different issuers tokenize the exact same underlying asset, inadvertently creating isolated and separate liquidity pools rather than a unified, deep market. Despite these structural inefficiencies, Jiang acknowledged that overall cryptocurrency market liquidity has improved significantly over recent years, even if the ecosystem still has substantial work to do to achieve seamless integration.

Stablecoin Adoption Hinges on Everyday Payments

Moving from tokenized securities and real-world assets to the domain of digital currencies, the conversation shifted toward the practical utility of stablecoins during a panel titled "Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend." Panelists debated the trajectory of stablecoin adoption, arguing that while these digital assets have successfully streamlined cross-border money transfers, widespread consumer adoption ultimately depends on whether users can seamlessly utilize them for routine, everyday expenses.

Mike Silagadze, founder and CEO of ether.fi, highlighted the dichotomy by pointing to financial hubs like Singapore. In such technologically advanced environments, consumers might comfortably hold digital dollars like USDC, but they still find themselves forced to rely on local fiat currency to pay routine bills and purchase groceries. This friction underscores the ongoing gap between advanced blockchain payment infrastructure and the practical requirements of everyday financial services.

Echoing this focus on consumer experience, Yvonne Chia, head of communications at USDD, argued that stablecoin issuers must prioritize the end-user perspective above all else. Chia asserted that the ultimate goal for the industry is to craft a user experience so frictionless that holding and spending stablecoins becomes completely intuitive, to the point where it no longer crosses the consumer’s mind that they are utilizing blockchain technology, treating it instead as a regular, frictionless part of their daily lives.

Silagadze reinforced this point, explaining that the fundamental reason stablecoins are still underutilized for daily commerce in many parts of the world is simply that the technology fails to plug natively into a person’s routine lifestyle.

Beyond practical usability at the checkout counter, regulatory hurdles continue to complicate the landscape, according to Ilya Podoynitsyn, co-founder and CEO of FinHarbor. Podoynitsyn pointed out that digital payment providers must constantly navigate complex regulatory frameworks that vary significantly across different international jurisdictions. This regulatory patchwork forces companies to continuously adapt their underlying infrastructure and compliance systems to satisfy localized legal requirements.

Ashna Vaghela, chief customer officer at crypto payments provider Mercuryo, added that stablecoin payments need to evolve until they are as straightforward and invisible as utilizing mainstream digital wallet solutions like Apple Pay, allowing users to complete commercial transactions instantly without ever needing to step outside of an application. Vaghela noted that invisibility is the entire point of mature payment technology.

These discussions unfolded against a backdrop where the total stablecoin market capitalization stood at approximately $306 billion, reflecting a modest year-over-year increase of about 2% following a dramatic 74% surge during the preceding 12-month period.

Onchain Trading Faces Liquidity Fragmentation and Risk Management Challenges

As the digital asset ecosystem matures, crypto trading platforms continue to grapple with fundamental difficulties in identifying available liquidity spread across a multitude of blockchain networks, alongside the persistent challenge of managing counterparty risk. These operational bottlenecks formed the core of the discussion during the panel addressing what is still missing in the onchain trading stack.

Austin Federa, co-founder of DoubleZero, explained that shifting liquidity dynamically between different blockchain networks remains substantially more complex and inefficient than moving capital within traditional financial markets. Federa characterized liquidity fragmentation not merely as an execution problem, but fundamentally as a data problem, noting that it is genuinely difficult for market participants to ascertain precisely how much liquidity truly exists across the vast onchain ecosystem.

On the risk management front, Miguel Morel, founder and CEO of blockchain analytics firm Arkham Intelligence, pointed out that modern trading firms can increasingly leverage transparent onchain data to accurately assess counterparty risks. This capability is particularly vital within emerging sectors like prediction markets, where certain participants may hold informational asymmetries over others. Morel noted that when a market maker knows precisely who is on the other side of a trade and consequently takes on less risk, they are empowered to offer tighter spreads, ultimately resulting in better, more competitive pricing for everyday customers.

Furthermore, Morel explained that this same granular blockchain data can assist cryptocurrency exchanges in evaluating inbound customer deposits, allowing platforms to automatically analyze the transactional origin of funds and streamline internal compliance decisions. Without needing to resort to invasive paperwork like collecting passports, platforms can discern the source of incoming deposits and determine whether to immediately permit trading activity or flag the capital for a more thorough compliance review.

Crypto Investors Face Tougher Exits as Markets Mature

Shifting the lens from trading infrastructure to venture capital, persistent liquidity challenges have significantly complicated investment exits for crypto venture capital firms, according to participants on the panel titled "The Exit Problem: How Investors Get Their Money Back."

Pulkit Gupta of Nomad Capital observed that liquidity within broader crypto markets has remained exceptionally subdued over recent months, with the majority of available capital heavily concentrated within the largest and most established cryptocurrencies. Gupta admitted that for altcoins, achieving a clean and profitable exit has proven to be a genuinely difficult endeavor for his firm, which has historically backed several prominent crypto projects featuring publicly traded tokens such as Movement, Solayer, and Berachain.

Reflecting a broader market adjustment toward realistic long-term expectations, Sonia Shaw, CEO of OneAsset, emphasized that the digital asset market has matured considerably, forcing early-stage startups to demonstrate much stronger business fundamentals than in previous market cycles. Recalling an era when some investors routinely anticipated a full liquidity exit within a mere six months, Shaw asserted that the market environment has permanently shifted away from such rapid horizons, viewing this cooling-off period as a healthy and positive sign of institutional maturation.

Adding to this perspective, Aleksandr Nechaev, partner at Funders VC, drew attention to the distinct operational challenges introduced by the relentless speed of product and market evolution in the crypto space. Nechaev noted that the exceptionally rapid pace of change places a heavy premium on a founder’s deep expertise and their individual ability to navigate uncertainty, making leadership quality a central pillar in modern venture investment decisions. These themes of adaptability and organizational resilience were explored further during the event’s subsequent startup pitch competition, which was powered by Funders VC.