Lim Say Cheong
Chevening Fellow at Oxford Centre for Islamic Studies and Chief Advisor for Digital Assets and Islamic Finance at ComTech Gold.
Real-world asset (RWA) tokenisation is increasingly shaping how modern finance works. By turning tangible, legally recognised assets into digital representations on programmable ledgers, tokenisation creates a workable bridge between traditional financial markets and the digital economy. This shift has been clearly acknowledged by the World Economic Forum in its May 2025 Insight Report, Asset Tokenization in Financial Markets: The Next Generation of Value Exchange, produced in collaboration with Accenture, where asset tokenisation is described as “the next generation of value exchange in financial markets.” Rather than viewing tokenisation as just another digital product, the report frames it as a deeper change to market infrastructure, similar to the shift from paper certificates to electronic book-entry systems, which reduces fragmentation, shorten settlement cycles, and bring greater transparency to capital markets.
This shift is taking place at a time when global wealth is changing both in scale and in where it is being created. The Global Wealth Report 2023, published jointly by UBS and Credit Suisse, estimates that global wealth could grow by about 38 percent by 2027, reaching roughly USD 629 trillion, with much of that growth coming from emerging markets. As wealth creation becomes more geographically and demographically diverse, investor expectations are evolving rapidly, accelerating demand for investment solutions that are easier to understand, easier to access, and more efficient to operate.
The Current Scale of Tokenised Real-World Assets
In absolute terms, tokenised real-world assets have already reached meaningful scale. On-chain data indicate that the tokenised asset market has surpassed USD 30 billion, with tokenised government securities and short-term debt instruments accounting for a significant share of total issuance. Early traction is particularly evident in tokenised money-market funds, where institutional platforms such as BlackRock’s BUIDL fund have issued billions of dollars’ worth of tokenised treasuries and cash equivalents. While these initiatives remain largely institutional, they clearly demonstrate that tokenisation has moved beyond experimentation and into live financial infrastructure.
Despite this growth, Shariah-compliant tokenised assets currently represent only a small fraction of the overall RWA market. Industry estimates suggest that Islamic tokenised RWAs account for well below five percent of global issuance, and likely closer to one to two percent in value terms. This imbalance reflects the dominance of interest-bearing instruments such as tokenised U.S. Treasuries and conventional money-market funds which form the backbone of early institutional tokenisation efforts.
Why RWA Tokenisation Matters for Islamic Finance
Within this context, RWA tokenisation represents a natural evolution for Islamic finance. Properly structured tokenisation is inherently grounded in real economic assets and verifiable ownership, aligning closely with Shariah principles that emphasise asset backing, risk sharing, and economic substance. These principles have been consistently highlighted in research by the Islamic Development Bank and the World Bank as foundational to resilient and inclusive Islamic capital markets.
Tokenisation offers Islamic finance a pathway to modernise market infrastructure without compromising ethical foundations. By embedding ownership, governance, and transparency directly into digital asset representations, tokenisation can enhance trust while expanding access to real productive assets.
Where Islamic Tokenisation Is Taking Shape
Where Islamic tokenisation does exist today, it is concentrated in specific asset classes and pilot initiatives. These include tokenised gold and other commodities structured on direct ownership rather than yield, early-stage sukuk tokenisation projects conducted largely through private placements or regulatory sandboxes, and Shariah-compliant private credit or Murabaha-based receivables that combine off-chain legal enforceability with partial on-chain settlement. A small number of experimental Islamic funds and asset platforms have also emerged, although most remain below the USD 100–300 million scale and do not yet match the size or liquidity of conventional tokenised money-market funds.
The relatively small share of Islamic RWAs is structural rather than principles. Most tokenised assets today are designed around interest-based instruments that are fundamentally incompatible with Shariah principles. In addition, Shariah governance has not yet been embedded at the protocol or platform level, with many tokenisation infrastructures remaining asset-agnostic and lacking systematic screening for riba, gharar, or asset tangibility. Legal and regulatory anchoring also continues to evolve, particularly where enforceable ownership and investor protection are required.
Case Study: ComTech Gold and Institutional-Grade Islamic Tokenisation
One of the most developed examples of Shariah-compliant RWA tokenisation is ComTech Gold, widely recognised as the first Shariah-compliant gold tokenisation platform. ComTech Gold structures tokenised gold as direct ownership of allocated physical gold held in secure vaults, with Shariah certification covering asset backing, custody arrangements, transferability, and the absence of interest-based yield. Ownership rights are represented digitally while remaining legally anchored to the underlying physical asset, ensuring alignment with Shariah principles of tangibility and lawful possession.
From a technological perspective, ComTech Gold is built on the XDC Network, an enterprise-grade blockchain designed specifically for trade finance and real-world asset applications. XDC Network operates as a hybrid blockchain, combining the transparency of public ledgers with the control and scalability required for regulated financial use cases. Its architecture supports fast transaction finality, low fees, and smart-contract functionality, while allowing compliance features such as permissioned access and identity controls to be layered where required.
The choice of XDC Network is particularly relevant for Islamic finance applications, where legal enforceability, auditability, and operational resilience are critical. By operating within a blockchain environment optimised for institutional adoption, ComTech Gold is able to reduce reliance on intermediaries, automate ownership transfers through smart contracts, and maintain an immutable record of transactions without compromising regulatory or Shariah governance requirements. Integration with an enterprise-focused blockchain infrastructure also facilitates interoperability with broader trade finance, payments, and settlement ecosystems.
While still modest in scale relative to conventional tokenised money-market funds, ComTech Gold demonstrates how Shariah-compliant RWA tokenisation can move beyond conceptual pilots into credible financial infrastructure. By aligning asset structure, Shariah governance, and blockchain design from the outset, the model offers a practical blueprint for how Islamic real-world assets can be tokenised in a manner that is both technologically robust and ethically grounded.
A Strategic Opportunity for the Islamic Finance Industry
Shariah compliant real world asset tokenisation is not simply another layer of financial technology added onto existing structures. At a deeper level, it represents a chance to rethink how finance is organised and what it is meant to serve. When done properly, tokenisation reconnects financial activity with real economic substance, ethical profit, and legal certainty. Instead of pushing value further into abstraction, it reinforces ownership, accountability, and genuine risk sharing, principles that Islamic finance has always placed at its centre.
There is also a practical opportunity here. By focusing on asset classes where demand already exists and economic linkages are clear, such as cash equivalents, real estate, private credit, and commodities, Islamic finance can move beyond small scale experimentation. These are areas where Shariah compliant structures are well established, investor understanding is relatively mature, and tokenisation can meaningfully improve transparency, access, and efficiency without undermining core principles. In many emerging markets, this also opens the door to broader participation by smaller investors who have historically been excluded from these asset classes.
Equally important is the role of credibility and trust. Real progress will not come from concepts or white papers alone, but from working examples that operate to institutional standards. Practical implementations such as ComTech Gold show that Shariah compliant tokenisation can work when asset backing, governance, legal enforceability, and technology are aligned from the start. These initiatives demonstrate that digital assets can meet regulatory expectations, satisfy Shariah requirements, and still deliver operational benefits. In doing so, they provide a reference point for regulators, investors, and Shariah scholars who are understandably cautious.
There is also a wider strategic dimension. Islamic finance has often found itself adapting to systems designed elsewhere, rather than helping to shape them. Tokenisation presents a rare opportunity to influence the next phase of financial infrastructure while it is still forming. By insisting on legal clarity, real ownership, and ethical boundaries from the outset, Islamic finance can help set standards that are not only Shariah compliant, but also broadly beneficial to the financial system as a whole.
If approached with discipline and patience, Shariah compliant tokenisation can support greater financial inclusion, reduce reliance on opaque intermediaries, and strengthen the link between finance and productive economic activity. More importantly, it allows Islamic finance to remain true to its foundational values while engaging confidently with modern technology. In that sense, this is not about keeping up with innovation, but about helping to shape a more transparent, resilient, and trustworthy financial system for the next era.
The Road Ahead for Tokenised Assets
Looking ahead, the outlook for tokenisation remains strong. A report by Boston Consulting Group, produced in collaboration with ADDX in 2022 and titled Relevance of On-Chain Asset Tokenization in a Crypto Winter, estimates that the global value of tokenised assets could reach around USD 16 trillion by 2030, equivalent to roughly 10 percent of global GDP. This growth is expected to come as blockchain adoption expands across both financial and real-world assets, including real estate, equities, bonds, funds, and other asset classes. The scale of this opportunity makes it clear why Islamic finance needs to move beyond peripheral involvement and take a more deliberate leadership role in carefully selected, Shariah-aligned asset categories.
At present, government securities and treasuries continue to anchor many tokenisation initiatives because of their liquidity and regulatory clarity. Real estate remains one of the most actively tokenised asset classes, while private credit is gaining traction as tokenisation improves transparency and facilitates secondary-market access. Commodities, particularly gold, also continue to play an important role for hedging, settlement, and liquidity management, alongside newer areas such as carbon credits and structured investment funds.
Legal Certainty as the Critical Enabler
The technology behind tokenisation is largely there. Distributed ledgers work, smart contracts execute as designed, and the mechanics of issuing and transferring digital assets are no longer the real bottleneck. What determines whether tokenisation can scale is legal certainty.
Tokenisation only makes sense when ownership is clear, enforceable, and recognised by law. Without that, a token is just a technical record, not a property right. This is why, in reality, no country would place its citizens’ property rights such as land, securities, or financial claims on a fully open, permissionless blockchain that sits outside national legal authority.
The European regulatory experience clearly demonstrates this. Under the EU’s Markets in Crypto-Assets Regulation (MiCA), lawmakers have been able to regulate cryptocurrencies only at the point where they are held or used by an EU resident, essentially at the wallet level. They have not been able to regulate how cryptocurrencies are created or issued in the first place, because decentralised issuance sits outside any single national or regional jurisdiction. This constraint does not apply to bonds or shares. Those instruments are issued within national legal frameworks, which is precisely why ownership is enforceable and investor protection mechanisms can be applied in practice.
For Islamic finance, this distinction is not technical but foundational. Islamic finance cannot operate where ownership is ambiguous. A transaction is either valid or invalid, not mostly acceptable. When ownership, possession, or contractual rights are unclear in law, the structure fails at the Shariah level, regardless of how sophisticated the technology may be.
In practical terms, a token that is not legally recognised cannot represent real ownership or milk. Without legal ownership, there is no valid possession or qabd. Without qabd, there can be no lawful risk sharing or income, and without these elements, the transaction cannot be Shariah compliant, even if it functions perfectly from a technical perspective. For example, in real estate tokenisation, this includes certainty over title, usufruct, lease rights, and income entitlement. If a token has no legal standing, it cannot fulfil the requirement of valid possession (qabd), nor can it support genuine risk-sharing arrangements such as Musharakah or Diminishing Musharakah structures. Structure matters, but so does the law behind the structure.
This is why Shariah compliant tokenisation is far more likely to succeed in permissioned or hybrid blockchain environments that operate under national sovereignty. These models allow the benefits of digital efficiency without giving up legal recognition. They also make it possible to build compliance properly into the system from the very beginning. Requirements such as KYC AML and CFT cannot be treated as afterthoughts. They need to be embedded directly into the design and issuance of tokens. Only through close cooperation between regulators financial institutions Shariah scholars and technology providers can tokenised Islamic assets gain real market credibility and ethical legitimacy.
In the end the future of Islamic tokenisation will not be decided by how decentralised a platform appears on paper. It will be decided by whether technology law and Shariah governance are aligned in a way that people, institutions and regulators can genuinely trust.
