Tokenized Real-World Assets Face Supply-Demand Mismatch and Fragmentation, Industry Leaders Warn

Tokenized assets are rapidly opening up unprecedented trading opportunities across the spectrum of modern financial markets, yet the accelerating supply of real-world assets (RWAs) being brought onchain has not yet been met by a corresponding wave of investor demand. This disconnect was a central theme highlighted by Alex Taaffe, the chief revenue officer at prominent crypto trading firm GSR, during a high-profile industry gathering.

Speaking on a panel dedicated to liquidity and market fragmentation at CONNECT by Cointelegraph: Singapore Edition on Oct. 9, Taaffe pointed out that while execution and liquidity are noticeably improving for alternative instruments such as pre-IPO stocks, commodities, and global equities—asset classes that retail and institutional investors previously struggled to access—the market for fully tokenized RWAs tells a different story. According to Taaffe, the sheer volume of assets being issued onchain has dramatically outpaced organic demand from buyers.

The event itself served as a major convergence point for the digital asset ecosystem, bringing together Web3 founders, institutional investors, and seasoned industry executives for a series of four in-depth panel discussions. These sessions tackled critical sector developments ranging from tokenization trends and stablecoin payment systems to onchain trading infrastructure and venture capital exit strategies, alongside a competitive startup pitch competition designed to spotlight emerging talent.

Elaborating on the structural imbalance within the tokenization space, Taaffe noted that the issue extends beyond simple buyer apathy. "Specifically on RWAs, and fully tokenized assets, there’s a supply and demand imbalance. There’s a ton of supply. Every asset manager issuer wants to do capital formation onchain," Taaffe told attendees. He explained that as more traditional financial institutions and digital-native asset issuers rush to tokenize assets across an increasing number of disparate blockchains, the resulting market has become deeply fractured, further scattering available liquidity.

Lingling Jiang, a partner at DWF Labs, weighed in on the discussion, echoing the sentiment that fragmentation continues to pose a formidable challenge for the sector. Jiang highlighted that the problem is particularly acute when multiple distinct issuers tokenize the exact same underlying asset, inadvertently creating isolated, competing liquidity pools rather than a unified, efficient marketplace. Despite these ongoing structural hurdles, Jiang acknowledged that overall cryptocurrency liquidity has advanced significantly over recent years, even if the industry still has considerable ground to cover before achieving seamless market integration.

Stablecoin Adoption Hinges on Everyday Payments

The challenge of bridging the gap between raw blockchain infrastructure and practical, daily financial utility was a focal point during the panel titled "Stablecoins at the Point of Sale: Cards, Wallets and the Race for Everyday Spend." Mike Silagadze, the founder and CEO of ether.fi, argued that while stablecoins have proven exceptionally effective at streamlining cross-border transactions and moving capital across vast geographical distances, their path to mass adoption ultimately relies on whether everyday consumers can seamlessly utilize them for routine retail expenses.

To illustrate this friction, Silagadze pointed to a scenario in major financial hubs like Singapore, where a tech-savvy consumer might hold a balance in USDC but is still forced to rely on traditional local fiat currency to pay routine bills and utility costs. This stark operational reality underscores the persistent divide separating cutting-edge blockchain payment rails from legacy consumer financial services.

Yvonne Chia, head of communications at USDD, emphasized that issuers must fundamentally reorient their approach around the end user’s perspective, asserting that user experience remains the single most critical factor for widespread success. "That’s the kind of direction that we want to move in, to make it as easy as possible for the user to have stablecoins, use stablecoins, to the point where it doesn’t cross their mind that they are using a stablecoin. It’s just a regular part of their lives," Chia explained.

Reiterating the core obstacle holding back mass retail adoption, Silagadze added, "The reason no one uses stablecoins in many parts of the world is because it just doesn’t plug into your day-to-day life."

Beyond the hurdles of consumer usability, complex regulatory frameworks continue to complicate matters for infrastructure providers, according to Ilya Podoynitsyn, co-founder and CEO of FinHarbor. Podoynitsyn pointed out that companies operating in the space must continually navigate a labyrinth of conflicting rules that vary dramatically from one jurisdiction to another. This regulatory fragmentation forces firms to constantly adapt their underlying technical infrastructure and compliance protocols to satisfy localized legal requirements.

Ashna Vaghela, chief customer officer at digital asset payments provider Mercuryo, suggested that the ultimate benchmark for stablecoin transactions is absolute invisibility—reaching a point where paying with a stablecoin is as straightforward and frictionless as using Apple Pay, allowing users to execute transactions without ever having to step outside an application. "I think that’s the whole point, to be invisible," Vaghela remarked.

These industry discussions unfolded against a broader macroeconomic backdrop where the total stablecoin market capitalization hovered around $306 billion. This figure represented a modest 2% increase year-over-year, following a dramatic 74% expansion observed over the preceding twelve months.

Onchain Trading Faces Liquidity Fragmentation and Risk Management Challenges

As digital asset markets mature, crypto trading platforms continue to grapple with the formidable task of mapping available liquidity across an expanding constellation of independent blockchain networks, all while keeping a tight grip on counterparty risk. These operational headaches took center stage during a panel exploring "What’s Still Missing in the Onchain Trading Stack in 2026."

Austin Federa, co-founder of DoubleZero, argued that shifting liquidity fluidly between different blockchain ecosystems remains significantly more complex and cumbersome than moving capital within traditional financial markets. Describing the core technical bottleneck, Federa stated that "fragmentation is not just an execution problem, it’s like a data problem," adding that "it’s actually very hard to figure out how much liquidity truly exists onchain."

Shifting the conversation toward risk management and security, Miguel Morel, founder and CEO of blockchain analytics powerhouse Arkham Intelligence, explained how sophisticated trading firms are increasingly leveraging transparent onchain data to accurately evaluate counterparty risks. This is especially vital in niche sectors like prediction markets, where certain market participants may hold significant informational advantages over others.

"If you know who’s on the other side and you’re taking less risk, you can offer a tighter spread," Morel noted, emphasizing that advanced data utilization can ultimately translate into more favorable pricing structures for everyday customers. Furthermore, Morel pointed out that the very same onchain analytics can empower exchanges to rigorously evaluate incoming customer deposits by tracking the historical origin of funds. This capability allows compliance departments to make informed decisions without resorting to invasive bureaucratic procedures.

"Without needing to ask for a passport, you can know where those deposits are coming in from," Morel said, noting that platforms can leverage this transparent ledger data to instantly determine whether deposited funds should be cleared for immediate trading or flagged for deeper compliance scrutiny.

Crypto Investors Face Tougher Exits as Markets Mature

Persistent liquidity constraints have also introduced significant complexities for early-stage crypto venture capital investors seeking viable exits, according to participants on "The Exit Problem: How Investors Get Their Money Back" panel.

Pulkit Gupta of Nomad Capital pointed out that liquidity conditions across the broader crypto market have been notably sluggish over the preceding three months, with the vast majority of trading activity remaining heavily concentrated within the largest, most established cryptocurrencies. "For me, on the altcoins, it has been really tough for us to get an exit," Gupta admitted, noting that his firm has financially backed several prominent crypto initiatives featuring publicly traded tokens, including Movement, Solayer, and Berachain.

Reflecting a broader industry-wide recalibration toward long-term sustainability, Sonia Shaw, CEO of OneAsset, emphasized that the digital asset market has evolved past its speculative infancy, now demanding that emerging startups demonstrate robust, verifiable business fundamentals rather than relying solely on hype. Recalling an era when some investors routinely anticipated rapid liquidity exits within a mere six-month window, Shaw remarked, "I don’t think the market’s like that anymore." She characterized this definitive departure from quick, speculative exits as a healthy and welcome sign of overall market maturity.

Aleksandr Nechaev, a partner at Funders VC, underscored the unique pressures introduced by the breakneck pace of technological and market evolution, noting that a founder’s deep expertise and adaptive capabilities have become the absolute center of gravity for modern investment decisions. These themes of resilience and navigating systemic uncertainty took center stage later in the program during the event’s startup pitch competition, which was powered by Funders VC.