Revolutionizing Capital Markets: The Rise of Real-World Assets in DeFi

The latest evolution in the trap by merge is tokenize equities.

Shares of popular companies like Strategy are now moving on chain, letting blockchain users trade stocks using tokens.

Now the tokenization of real world assets grew significantly in the first half of 2025, with $24 billion now on chain thanks to private credit and also US Treasuries.

Now tokenize equities only figure to help the market.

Explode even further in the second half of this year and as the crypto investors say, we may still be early.

Well joining me this morning is Baji Luminati, CEO of Centrifuge.

Well, Bhaji, thank you so much for joining me.

So first and foremost, on chain real world asset markets are seeing a surge powered by institutional participation.

So when we say the S&P 500 index is going on chain, what does that actually mean?

Yeah, thank you so much for having me.

Really great to be back.

So last week at ECC in Cannes we announced a partnership between Centrifuge and the S&P, and there's two components to this partnership.

There's the index business, so Dow Jones indices, which manages 25 trillion.

15 trillion um in Chad and has over 1 trillion traded daily and linked exposures across ETFs, derivatives, and structured products.

We're doing a partnership with them where we're building what we call the proof of index product, which is an infrastructure that allows any asset manager to build funds tracked to an S&P index on chain.

The second part of the partnership was that we're actually as a first show of that technology building the S&P 500 index fund.

So as I heard just a couple of minutes before I joined, it is a really incredible full circle moment where Coinbase was just listed as part of the S&P.

500.

Now we're tokenizing the S&P 500 and that will be available on chain.

So we believe in a future and we've worked really closely with the S&P team to start to put steps in place to realize this where all equities and all stocks and all assets are tokenized and available in the on-chain economy.

Well, as we kick off the second half of 2025, it's a great time to take a look at what we've seen in the first half, and this increasing interest in RWAs does signal a major market shift.

So what do you think is behind the RWA market hitting $24 billion in the first half of this year?

Yeah, a huge part of that growth to 24 billion came from stablecoins.

So we're seeing a very strong correlation between the rise of tokenized treasuries and the rise of stablecoins.

So the stablecoin market is oftentimes backed by tokenized Treasury products to provide yields to their customers, and the user behavior is this recognition that They should be getting yield when they're holding stablecoins.

So there's been a massive shift to stablecoins like D and Agora, and a lot of these yield bearing stablecoins that are passing some of that yield back to the holders, and they're working with RWA providers to manage the reserve, manage the underlying, and focus on the fund side of it so that they can focus on the growth and the distribution.

Ed on top of that stablecoin growth, we're seeing a lot of tailwinds from the US with regulatory changes.

We're seeing an increased institutional readiness and excitement to start participating in the on-chain economy and to start building technology and bringing their products on chain to start reaping some of those benefits of blockchain.

Yeah, and the regulatory landscape is something that everyone is keeping their eye on.

But before we get to that, I do want to ask you about OpenAI and SpaceX.

They are no doubt highly coveted shares that investors would love to get their hands on, and Robin Hood is giving European customers some of their tokens, though OpenAI is pushing back on Robin Hood, saying these aren't.

So tell me about pre-IPO tokenization and your thoughts.

Yeah, I mean, it was an incredible backdrop to start HCC when we had Robin Hood and Vlad talking about the work that they're doing for tokenization.

I think ultimately Robin Hood has always been a trailblazer.

You need to move fast and break things, and they are bringing us all in the right direction.

There's some questions around the specific ownership of the equity and access to these those pre-IPO shares, but ultimately there's many different folks that are focused on getting to that same end goal with different paths.

So where Robin Hood is looking at. private free IPO where groups like Kracken are looking at bringing existing individual shares on chain, where we're looking at working with index providers and bringing those indices on chain.

Ultimately we're all working towards this end point where we want to make every single asset accessible and tradable and bring that collateral mobility that you get from on chain markets.

And speaking of accessibility, we will be keeping a close eye on crypto Week taking place in the nation's capital mid July.

But the SEC's take on DFI has changed quite dramatically in just under 6 months here.

And in a media interview, Chair Paul pledge to empower businesses to innovate through tokenization.

So with the SEC making tangible progress on crypto regulations and embracing tokenization, how do you think this shift will impact the future of capital formation as well as the way that businesses innovate in this space?

Yeah, we're starting to see just the impact of that stance that they're taking happening already, and a lot of that is just readiness from these large institutions and banks and fintechs to take bigger moves into the technology and be earlier as it relates to how can we start to bring this innovation back to the US and how We start to empower teams with the confidence that there won't be regulatory backlash and that they will be empowered to drive innovation from the US, so the statements around building a firm foundation to innovate and come out with new products that bolsters the work that folks want to do.

So just last week at HCC, I mean, Dozens of companies are talking about moving back onshore, opening offices in the US, and how can they ensure that they're stationed in the financial capital of the world as it soon becomes the crypto capital of the world.

So the progress we're making on The stablecoin Act and the people that we have in place and the great support that they've shown for the work that we're doing has already had an outsized effect on the confidence and the readiness from these major institutions and banks to put their brand and their work behind the technology.

Yeah, and Baji, as someone who's entrenched in the space and talks to a lot of stakeholders, how do you think the SEC will balance the need for innovation and tokenized securities, especially given the Securities Industry and Financial Markets Association's call for transparent rulemaking to ensure a level playing field.

What do you make of that?

I think it's, it's a long path to get there, but it's a clear path.

I mean, ultimately we within crypto, we want to follow the regulatory guidelines, and the challenge we've had is that we just didn't have strict guidelines in the past.

So what we need are very clear rules, very clear guardrails and expectations of how we can build, and then we will follow.

So we want to be by the book.

We want to do it the right way, and in the past we just haven't had that clarity and that visibility of what that path looks like.

So the whole industry is really eager to embrace the US and the regulation that we can work collaboratively to build out together just as they're eager to embrace the innovation that we want to bring in.

And Baji, finally, before I let you go for viewers out there who are wondering what it means for the investment landscape for retail investors in terms of products, what do you expect to see in the near future?

Uh, everything on chain right now we're making great progress on that, uh, on the equity side, on the fixed income side.

We're working towards real estate and private credit, so our core view and belief that we're working towards is that we can absolutely democratize.

Access to all investment products and let anyone come in at any price point from anywhere in the world.

So on Salana today, on Ethereum, you can start to get access to these products, and we want everyone to feel empowered to have the same investment portfolio and sophistication as the most sophisticated institutional investors do.

OK, Baji, well, we will have to leave it there but great seeing you again and thank you so much for weighing in with your insights and your perspective.

Thank you for having me.