What Is the “Liquidity Problem” That RWA Tokenization Attempts to Solve?
The "liquidity problem" that Real-World Asset (RWA) tokenization attempts to solve is the illiquidity and high transaction costs associated with traditional assets like real estate, private equity, and fine art. By tokenizing these assets, they are converted into fractional, divisible, and easily transferable digital securities on a blockchain.
This allows for 24/7 trading, immediate settlement, and a broader investor base, significantly enhancing their liquidity and reducing the time and cost required for transactions.