Will tokenization go mainstream as founders seek alternatives to traditional funding?

Tokenization has become a valuable alternative for founders seeking to avoid the often burdensome traditional VC/PE funding route. 

Tokenization of real-world assets (RWA) is the process of converting ownership rights in a real-world asset — such as real estate, equity, artwork, or commodities — into a digital token that exists on a blockchain.

Each token represents a share, claim, or stake in the underlying asset. Once tokenized, the asset can be traded, transferred, or used as collateral much more efficiently than through traditional systems.

This week Stobox released a report on the current state of  global tokenization. 

Stobox is a licensed and regulated tokenization provider building financial markets for small and medium businesses. 

It provides an all-in-one solution for tokenizing, investing, and trading RWA and operates in multiple jurisdictions, including the United States. Since its inception in 2018, the company has tokenized over $500 million in assets across finance, mining, energy, and real estate. 

I spoke to Stobox co-founders Gene Deyev (CEO) and Ross Shemeliak to learn more. 

A vision for seamless, decentralised ownership

According to Deyev, Stobox launched in 2018, when the crypto space was still "highly experimental and unstructured. Blockchain was new to everyone — developers, finance professionals, and regulators.

Since then, we've witnessed the market mature from a kind of "anarchy" to one where blockchain assets are increasingly treated like traditional ones."

Stobox's focus is on enabling real-world asset tokenization — not just digital products, but tangible assets like real estate and businesses. 

It's building the technology and narratives to support the transition from legacy systems to decentralised ownership. It's not just about turning things into tokens — it's about embedding compliance, rights, and identity verification into these tokens so they function in the real world. 

Deyev contends:

"Our goal is to make ownership, trade, and investment in these assets as seamless as using electricity — something you don't need to think about.

"Traditional ownership systems are outdated and siloed; we believe ownership, just like communication, should be decentralized and accessible globally."

Europe diversifies assets while Stablecoins capture majority share

Europe is seeing growth beyond traditional real estate tokenization — notably in  sectors such as agriculture, medical research, and natural resources, where various initiatives such as P2P energy marketplaces have expanded globally from pilots to commercialisation over the last decade. 

Further, Stablecoins have experienced impressive growth, increasing by 46% from $100 billion to $146 billion. As a result, they now represent the majority of the tokenisation market. Just this week Visa made a "strategic investment" in stablecoin infrastructure startup BVNK.

Deyev asserts that the real opportunity isn't tied to the rise of any single industry, but rather lies in building the infrastructure for high-quality tokenization that benefits all sectors.

Two key areas are driving this shift: data-rich tokens and security tokens, particularly in DeFi and lending protocols utilizing tokenized real-world assets.

He contends:

"This is a rising tide that will lift all boats, bringing more liquidity to traditional use cases while enabling more sophisticated financial applications."

The UK as a tokenization hub

The report finds that the UK is establishing itself as a key hub for tokenization, with its share of global tokenized assets by jurisdiction rising to 11 per cent in 2024 from 7 per cent the previous year. In the market for special purpose vehicle (SPV) jurisdictions—legal entities used for asset issuance—Britain's share climbed from zero to 7 per cent.  An SPV is an entity that runs token issuance and sales to investors.

Underlying the SPV increase, UK authorities have promoted tokenisation through initiatives such as the Digital Securities Sandbox by the FCA and Bank of England.  

The DSS is a regulatory framework that allows firms to test and operate DLT-based securities issuance, trading, and settlement under temporarily modified rules. P

articipants can use new technologies to perform activities traditionally reserved for central securities depositories and trading venues, such as notary, maintenance, and settlement.

Bitpanda and Coinbase secure UK regulatory green light 

Furthermore, in February, the Austrian cryptocurrency platform Bitpanda was officially launched in the UK after obtaining approval from the Financial Conduct Authority (FCA). It marked a significant expansion in its European presence alongside its MiCAR license for EU crypto service providers. 

For retail investors, this means access to 500+ cryptocurrencies—the widest selection of cryptocurrencies available on the market on one secure platform. Access to Bitpanda staking provides the ability to earn rewards on digital assets. 

Banks, financial institutions, and crypto platforms can now integrate Bitpanda's regulated infrastructure into their offerings. Therefore, major banks and fintech in the UK can seamlessly offer crypto trading, investment, and custody services with full regulatory oversight.

Separately, Coinbase was also granted permission to operate a full suite of cryptocurrency services in the UK, including trading and custody, for both retail and institutional investors. 

Both platforms allow users to buy, trade, and hold cryptocurrencies, many tokenized representations of value, including stablecoins, utility tokens, and increasingly, real-world asset (RWA) tokens like tokenized equities, commodities, or bonds. 

Germany is positioned to lead in tokenized finance with the underused FlexCo model

Further in Europe, the Markets in Crypto-Assets (MiCA) regulation has reshaped the European tokenization landscape, categorising commodity tokens as Risk-Weighted Assets (RWA) and creating a clear path for regulated issuance of tokens backed by real-world assets.

A legislative change called "Flexible Kapitalgesellschaft" (FlexCo) launched in Germany last year,  designed to be more adaptable, especially for startups and young companies. FlexCo allows for simplified ownership transfer of shares and simplifies ownership transfer for tokenized equity.

Shemeliak predicts that while still underutilised, "it is expected to gain adoption and enable Germany to become a leading tokenization jurisdiction in the coming years."

The challenge of liquidity is a persistent painpoint

According to Shemeliak, one key takeaway from the report is that liquidity remains a huge challenge for business owners. Many don't have access to the networks or tools for global fundraising, which is why they come to us. Another insight is the difficulty of balancing regulatory compliance with profitability. 

"Many new providers enter the space without fully grasping the legal frameworks, and they often disappear just as quickly."

For institutional players, tokenizing a fund is relatively straightforward — it's just a more efficient way of issuing traditional finance instruments.

However, for non-financial businesses, tokenization still falls under securities law. According to Deyev, the UK has a small offering exemption that allows businesses to raise up to £8 million without needing full FCA approval—as long as they meet compliance requirements. 

"That's a huge opportunity for smaller, non-traditional issuers, though many still don't realize that tokenized assets are classified as securities."

"No longer the crypto hypecycle"

Further, Deyev contends that the "speculative, hype-driven altcoin era is fading. What's emerging is a serious push — including from the US administration — toward stablecoins, regulated assets, and institutional infrastructure."

He asserts the single biggest shift will come when government asset registries move to the blockchain. 

"Right now, ownership is still managed via outdated, siloed systems. When ownership data — for things like apartments — exists natively on-chain, that's when true tokenization will happen.

today we're in a quasi-tokenization phase, often relying on SPVs (Special Purpose Vehicles) as proxies. It's still complex, with legal and transparency challenges.

But when registries modernize, asset transfer, fractionalization, and trading will become truly seamless."

Deyev stresses that pre-existing or nascent startups wanting to enter the tokenisation space need to be honest with themselves. 

"This is no longer the crypto hype cycle — it's institutional, regulated, and demanding. 

Ask yourself what kind of company you want to build and what kind of life you want to lead. You'll be working across finance, law, blockchain, and maybe even AI. 

It takes deep domain knowledge, long-term dedication, and a clear mission.

Many startups rush in without understanding the responsibilities or regulations, and they burn out quickly. If you're serious, do your homework, understand your role, and then execute with clarity."