Tokenisation could open private markets. It cannot make illiquid assets liquid

Fractional ownership, shared records and programmable transfers could widen access to private credit, private equity and real estate funds. The evidence also shows why smaller tokens do not remove eligibility rules, valuation lags or the need for buyers.

By RWAWeekly team · Nov 6, 2026 · Board data as of Nov 6, 2026, 06:26 UTC

Private markets contain assets that rarely appear on a public exchange: loans negotiated directly with businesses, shares in privately owned companies, and funds holding property or infrastructure. They can offer different sources of income and growth from listed markets, but access has often required large commitments, long holding periods and institutional administration.

Tokenisation offers a possible change to that operating model. It records an asset, or an interest in one, as a digital token on a distributed ledger. Those tokens can be divided into small units, transferred under programmed rules and administered from records shared by the relevant parties.

That is the opportunity: make private-market products easier to distribute, hold and transfer. It is not a promise that every private asset becomes suitable for every investor, or that an active market will appear simply because a token exists.

The access barrier is operational as well as financial

Private-market access is restricted by more than the price of a whole asset. Fund minimums, investor-classification rules, onboarding, suitability checks and the cost of servicing small accounts all shape who can participate.

BlackRock chairman and chief executive Larry Fink connected those issues in his 2025 annual letter: “Tokenization allows for fractional ownership. That means assets could be sliced into infinitely small pieces. This lowers one of the barriers to investing in valuable, previously inaccessible assets like private real estate and private equity.”

Fractionalisation matters most when a conventional fund structure makes a small commitment uneconomic. A digital unit can represent a fraction of a fund interest, while automated onboarding and register-keeping can reduce the work involved in administering it. The benefit is therefore not merely a smaller denomination; it is a distribution system that can support more, smaller holdings.

A 2023 Hamilton Lane private-credit feeder illustrates both the progress and the limit. Its launch announcement said the minimum fell from $2 million to $10,000 through a tokenised feeder. Yet the same document restricted access to US qualified purchasers with at least $5 million in invested assets. A lower ticket did not remove the legal gate.

Better records can remove friction before they add liquidity

Some of tokenisation’s clearest benefits sit in the back office. A shared register can reduce repeated reconciliation between managers, transfer agents, distributors and custodians. Programmed transfers can check eligibility and apply holding restrictions. Cash and asset legs can be designed to settle together, reducing the gap in which one party has performed and the other has not.

The UK Financial Conduct Authority made this point in its October 2025 fund-tokenisation consultation: “Tokenisation can make fund management more efficient as it gives firms operating or distributing the fund the same records of information. This reduces the costs of reconciling and sharing data.”

Those savings are not automatic. The FCA describes staged adoption, beginning with tokenised fund registers while some cash movements continue through conventional systems. If firms reproduce every old process off-chain as well as on-chain, complexity can increase rather than fall. The useful question is which reconciliation, delay or manual control has actually disappeared.

Chart: live board data as of Nov 6, 2026, 03:26 UTC. Information only, not investment advice.

What is already on-chain

RWAWeekly’s tokenised alternatives board tracks $3.10B in distributed value as of Nov 6, 2026, 06:26 UTC. That is 13.2% of the board’s $23.39B net total, which removes the identified fund-of-funds overlap. The segment currently covers private-credit exposures rather than the full range of private equity and real estate funds discussed in this article.

The chart shows where tokenised exposure exists, not how much of it trades. Distributed value is the on-chain supply multiplied by the relevant issuer net asset value; it is not secondary-market turnover. That distinction matters throughout private markets: a token can be visible and transferable without having a deep pool of buyers.

For issuers, the attraction is a new distribution and servicing channel. For investors who meet the product’s rules, the potential benefits are smaller entry units, more portable records and, in some structures, another route to a sale. The underlying loans, companies or properties do not change.

Liquidity is a market outcome, not a token feature

Tokenisation can make an interest technically transferable. It cannot guarantee that somebody will buy it promptly, in size and near its last reported value.

Frederick Shaw, Hamilton Lane’s global head of operations and chief risk officer, explained this distinction in a Citywire interview published on Nov 3, 2022: “Right now, there are markets that are developing to allow investors to sell a token if they hold it. They’re not nearly as deep with liquidity as public equity markets, or public debt markets, or the like, but they are starting to develop.”

The OECD’s January 2025 policy paper reaches a similar conclusion: “The lack of liquid markets for tokenised assets impedes large-scale investor participation.” It also warns that separate, non-interoperable networks can divide liquidity rather than concentrate it.

Private assets add a further constraint. A property fund may value its holdings periodically; a private-equity fund may have a multi-year life; a private-credit vehicle may allow redemptions only at set intervals or through a queue. Continuous technical transferability cannot, by itself, make the underlying portfolio continuously saleable.

The FCA is explicit on this point in the same consultation: “There is no guarantee that there will be an active secondary market in a particular product even if the technical functionality exists.” A realistic liquidity claim therefore needs evidence of eligible counterparties, trading volume, spreads, market-makers and redemption terms, not just a blockchain address.

Valuation and legal rights still need scrutiny

An on-chain balance can be updated continuously while the asset’s valuation is not. Shaw offers a useful warning in the Citywire interview: “The value is not determined on the trading price, but the value is determined on our reporting.” That reporting cadence, the valuation method and any difference between a token’s trading price and fund NAV remain central to understanding the product.

Legal structure matters just as much. Some tokens are native fund shares; others are interests in a feeder, receipts for assets held by a custodian, or contracts that provide exposure without direct ownership. The holder’s claim, voting rights, redemption rights and protection if an intermediary fails can differ across those structures.

US Securities and Exchange Commission commissioner Hester Peirce put the principle plainly in a July 9, 2025 statement: “Tokenized securities are still securities.” She also noted that third-party structures can introduce counterparty risks and that a token may not confer legal and beneficial ownership of the underlying security.

Custody is consequently not an optional detail. Who controls the keys, who maintains the authoritative ownership register, and who can reverse an error or enforce a transfer restriction are practical legal and operational questions. Public-chain transparency does not answer them.

A credible route to broader access

The strongest case for tokenisation is cumulative rather than magical: smaller economical units, fewer repeated records, automated eligibility checks and more efficient transfers can together support wider distribution. For private markets, those improvements could give retail investors potential access to exposures that have largely sat inside institutional portfolios, where regulation and product design permit it.

The counterweight is equally important. The BIS-hosted Financial Stability Board summary published on Aug 28, 2025 says that “many of these benefits are unproven” and identifies liquidity mismatch, valuation problems and operational fragilities among the vulnerabilities. If a token appears easier to exit than its underlying assets, that perception can itself create redemption pressure.

The measure of progress should therefore be concrete. Are minimums and administration costs genuinely lower? Can eligible investors transfer without duplicating the old process? Are valuations timely and understandable? Is there real secondary activity, or only an issuer redemption window? And does the legal document give the holder the rights that the interface appears to show?

Tokenisation can widen the doorway into private markets. It does not change the nature of what lies beyond it.

See also: Tokenised alternatives: access and liquidity terms · RWAWeekly methodology · Full product board · All articles

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Figures are a snapshot and will change. Distributed value is not a measure of trading activity or liquidity. Eligibility varies by jurisdiction. Many tokenised products are securities restricted to qualified investors. In the US, this generally means accredited investors / qualified purchasers, as applicable. Nothing here is an offer or solicitation to buy or sell any product. Information only. Not financial, investment, tax or legal advice.