Tokenizing Real Estate: A New Frontier

Frank S. O'Hara
Sep 2
4 min read

Updated: Sep 13

The Disruptive Force of Hedera in the Real Estate Market (Update)

image of website — Hedera - Asset Tokenization Studio

The potential profitability of tokenizing real estate and real-world assets depends on evolving market dynamics, regulation, and technological maturity. Below is an updated breakdown incorporating the latest developments as of August 2025.

Market Size and Forecasts

The tokenized real-world asset market now stands between US $24 and US $26 billion, reflecting explosive growth over the past three years. Forecasts suggest a wide range of outcomes, from US $16 trillion by 2030 to as much as US $30 trillion by 2034, underscoring the sector’s transformational potential. Real estate remains one of the largest opportunities, with projections that it could account for a significant share of tokenized asset growth over the next decade.

Real-World Deployment Examples

Japan’s GATES plans to tokenize more than US $200 billion in property using the Oasys blockchain, beginning with a US $75 million rollout of Tokyo real estate. In China, Seazen Group has launched a digital assets institute in Hong Kong to explore tokenizing income streams and intellectual property, with a potential Wuyue Plaza NFT-linked project by late 2025. In Dubai, Prypco Mint sold a tokenized villa worth about US $476,000 (Dh1.75 million) in less than five minutes. In the United States, World Property Ventures is preparing to launch a digital securities division in Miami by 2026. These examples demonstrate that tokenization is moving beyond theory into practical execution.

Liquidity and Market Infrastructure

Liquidity remains one of the largest challenges. Although tokenized assets are tradable around the clock, secondary markets remain shallow with low trading volumes and long holding periods. Structural barriers such as regulatory whitelisting, custody concentration, and unclear valuation practices limit full liquidity potential. Until these issues are addressed, profitability from tokenized assets will remain partly constrained.

U.S. Stablecoin Regulation (GENIUS Act)

The GENIUS Act was signed into law in July 2025, establishing a clear framework for payment stablecoins. It requires issuers to maintain one-to-one reserves in cash or high-quality collateral, undergo regular audits, and operate under federal oversight. Only permitted issuers such as bank subsidiaries and approved nonbanks can issue stablecoins in the United States. Major corporations including Bank of America, Citigroup, Walmart, and Amazon are preparing to explore stablecoin issuance under this framework. While this legislation provides much-needed clarity, experts note that compliance and implementation timelines may delay widespread adoption.

Integration with the Tokenized Economy

Stablecoins are increasingly seen as the backbone of the new tokenized economy. They are expected to serve as the settlement layer for tokenized real estate and other assets, enabling faster payments, cross-border transactions, and seamless integration with decentralized finance. Academic studies and pilot projects are also experimenting with improved token designs, such as two-tiered models that separate ownership from liquidity to better support large-scale markets like infrastructure and energy. These innovations suggest that the tokenized economy is maturing into a more robust ecosystem, though practical adoption is still limited.

Real-World Risks and Investor Protections

The tokenization of real estate has also exposed risks. Platforms such as RealT, which offered tokenized rental properties in Detroit, have faced serious problems including tenant complaints, property disrepair, evictions, and legal disputes. These issues highlight that while blockchain improves transparency, profitability still relies on strong asset management and governance. Investors must perform thorough due diligence before participating in tokenized offerings.

Investor Brief: Tokenized Real Estate and RWA Outlook (August 2025)

Market Size and Growth

Current tokenized RWA market: US $24–26 billion (up 300–380% in 3 years)
Forecasts:
- US $16 trillion by 2030
- US $30 trillion by 2034
Real estate projected to capture a major share of growth

Regulation (U.S.) – GENIUS Act, July 2025

Stablecoins must be backed 1:1 with cash or high-quality collateral
Regular audits and disclosure required
Only approved issuers (banks and licensed nonbanks) may operate
Corporations (Bank of America, Citigroup, Walmart, Amazon) preparing to issue stablecoins

Deployment Examples

Japan: GATES to tokenize US $200 billion in property (initial US $75 million launch)
China: Seazen Group launching digital assets institute in Hong Kong
Dubai: Prypco Mint villa sold (US $476,000) in under 5 minutes
U.S.: World Property Ventures building digital securities division in Miami

Challenges

Secondary markets remain illiquid
Custody concentration and valuation opacity
Governance and asset management risks (example: RealT in Detroit)

Opportunities

Broader investor access and global markets
Lower transaction costs through blockchain automation
New revenue streams via DeFi integrations (staking, lending, NFTs)
Stablecoins set to become backbone of tokenized real estate economy

Tokenized real estate is evolving into an institutional-grade asset class. Profitability will hinge on solving liquidity constraints, ensuring regulatory compliance, and scaling governance. With multi-trillion-dollar forecasts and stablecoin regulation now in place, early adoption offers significant upside.

Conclusion

Tokenized real estate and real-world assets are rapidly moving toward institutional adoption. Market forecasts suggest multi-trillion-dollar growth over the next decade, supported by regulatory clarity from legislation such as the GENIUS Act and by real-world case studies across Asia, the Middle East, and the United States.

The advantages remain clear: lower transaction costs, broader investor access, increased transparency, and potential for new revenue streams through DeFi integration. Yet liquidity challenges, compliance hurdles, and operational risks must be overcome before tokenization can reach its full potential.

As of today, tokenized real estate is one of the most promising emerging asset classes. Its profitability will ultimately depend on execution, governance, and the speed at which liquidity and regulatory frameworks evolve.