Regulatory Gaps Push RWA Tokenization Firms to Look Abroad, Tiger Research Report Says

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Regulatory Gaps Push RWA Tokenization Firms to Look Abroad, Tiger Research Report Says

The global market for tokenized real-world assets (RWA) has surged to an estimated $25 billion to $36 billion in the first half of 2026, drawing significant interest from institutional investors. However, a new report from Asian Web3 research and consulting firm Tiger Research warns that a patchwork of underdeveloped regulations is creating a critical bottleneck for companies in the space. The firm’s analysis, titled ‘Start RWA Tokenization Abroad First,’ advises firms in jurisdictions with unclear or absent legal frameworks to proactively expand into foreign markets rather than wait for domestic clarity.

Three Paths Forward for RWA Firms

Tiger Research outlines three primary strategies for companies facing regulatory uncertainty: waiting for domestic laws to mature, utilizing government regulatory sandboxes, or expanding operations overseas. The report argues that the third option, while operationally challenging, offers the most immediate path to real-world experience and market traction. The RWA tokenization market, which converts physical assets like real estate, commodities, and bonds into digital tokens on a blockchain, has grown rapidly. Institutional investors are drawn to benefits including automated payments, faster settlement times, and access to a broader, global customer base.

The Global Nature of Tokenized Assets

The report emphasizes that the RWA market is inherently global by design. Digital tokens do not respect national borders, and the most liquid markets for these assets are often in jurisdictions with clearer regulatory frameworks, such as Singapore, Switzerland, and parts of the United Arab Emirates. Tiger Research notes that companies based in regions with regulatory vacuums—including several in Asia and the Middle East—risk falling behind competitors who have already gained operational experience abroad. The firm stresses that waiting for domestic legislation could take years, during which market leadership could be ceded to more agile international players.

Practical Challenges and Strategic Imperatives

Expanding into foreign markets is not without its difficulties. Companies must navigate different legal systems, compliance requirements, and operational logistics. However, Tiger Research argues that the benefits of gaining early, real-world experience outweigh these hurdles. The report calls on firms to view international expansion not as a last resort, but as a strategic necessity to build credibility, attract institutional capital, and inform future domestic regulatory frameworks. By operating in established markets, companies can also gather data and case studies that may help shape more favorable regulations back home.

Conclusion

As the RWA tokenization market matures, the gap between regulatory frameworks and technological innovation remains a defining challenge. Tiger Research’s analysis suggests that proactive international expansion is the most viable strategy for firms in under-regulated jurisdictions. While the path requires significant investment and adaptation, the report concludes that the long-term rewards—market leadership, institutional trust, and operational expertise—make it a necessary move for serious players in the space.

FAQs

Q1: What is RWA tokenization?
RWA tokenization is the process of representing ownership of real-world assets, such as real estate, commodities, or bonds, as digital tokens on a blockchain. This allows for fractional ownership, faster transactions, and access to a global investor base.

Q2: Why are regulatory gaps a problem for RWA firms?
Without clear legal frameworks, companies face uncertainty regarding compliance, investor protection, and the legal status of tokenized assets. This can deter institutional investors and slow market growth.

Q3: Which regions are considered favorable for RWA tokenization?
Jurisdictions with clear and supportive regulatory frameworks, such as Singapore, Switzerland, the United Arab Emirates, and certain U.S. states, are often cited as more favorable environments for RWA tokenization projects.

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