2026 Institutional-Grade RWA Infrastructure Overview: The market is approaching the $20 billion mark, with each segment showcasing its strengths

Author: Mesh

Editor: Deep Tide TechFlow

Honestly, the development of institutional-grade RWA (Real World Asset) tokenization over the past six months warrants close attention. The market size is approaching $20 billion. This is not hype; genuine institutional capital is being deployed on-chain.

I have been following this field for some time, and recent developments have been astonishing. From government bonds and private credit to tokenized stocks, these assets are moving onto blockchain infrastructure at a faster pace than market expectations.

Currently, five protocols form the foundation of this space: Rayls Labs, Ondo Finance, Centrifuge, Canton Network, and Polymesh. They are not competing for the same clients but are addressing different institutional needs: banks require privacy, asset managers seek efficiency, and Wall Street firms demand compliant infrastructure.

This is not about who “wins,” but about which infrastructure institutions choose and how traditional assets are migrating trillions of dollars through these tools.

Overlooked Market Approaching $20 Billion

Three years ago, tokenized RWA was hardly a category. Today, on-chain deployment of assets like government bonds, private credit, and public stocks is nearing $20 billion. Compared to the $6-8 billion range at the start of 2024, this growth is significant.

Honestly, the performance of niche markets is more interesting than the total size.

According to the market snapshot from rwa.xyz as of early January 2026:

Government bonds and money market funds: approximately $8-9 billion, accounting for 45%-50% of the market

Private credit: $2-6 billion (smaller base but fastest-growing, representing 20%-30%)

Public stocks: over $400 million (rapid growth, mainly driven by Ondo Finance)

Three key drivers accelerating RWA adoption:

Yield arbitrage attractiveness: Tokenized government bonds offer 4%-6% returns with 24/7 access, whereas traditional markets have T+2 settlement cycles. Private credit tools provide 8%-12% returns. For institutional finance managers managing billions in idle capital, this is straightforward.

Regulatory frameworks improving: The EU’s Markets in Crypto-Assets Regulation (MiCA) has been enforced in 27 countries. The US SEC’s “Project Crypto” is advancing on-chain securities frameworks. Meanwhile, No-Action Letters enable infrastructure providers like DTCC to tokenize assets.

Mature custody and oracle infrastructure: Chronicle Labs has handled over $20 billion in total value locked (TVL), and Halborn has completed security audits for major RWA protocols. These infrastructures are mature enough to meet fiduciary standards.

Despite this, industry faces major challenges. Cross-chain transaction costs are estimated at up to $130 million annually. Due to high capital flow costs exceeding arbitrage gains, price differences of 1%-3% exist for the same assets traded across different blockchains. The conflict between privacy needs and regulatory transparency remains unresolved.

Rayls Labs: The Privacy Infrastructure Wall Street Truly Needs

@RaylsLabs positions itself as a compliance-first bridge connecting banks and DeFi. Developed by Brazilian fintech Parfin, and supported by Framework Ventures, ParaFi Capital, Valor Capital, and Alexia Ventures, its architecture is a public permissioned Layer 1 blockchain compatible with EVM (Ethereum Virtual Machine), designed specifically for regulated entities.

I’ve been following its Enygma privacy tech stack development for some time. The key isn’t just technical specs but its methodology. Rayls is solving real problems banks face, rather than catering to DeFi community fantasies about banking.

Core features of the Enygma privacy stack:

Zero-Knowledge Proofs: Ensuring transaction confidentiality

Homomorphic Encryption: Supporting computations on encrypted data

Native operations across public chains and private enterprise networks

Confidential Payments: Supporting atomic swaps and embedded “Delivery-versus-Payment” (DvP)

Programmable Compliance: Selective data disclosure to designated auditors

Real-world use cases:

Brazil Central Bank: For CBDC (Central Bank Digital Currency) cross-border settlement pilot

Núclea: Regulated tokenization of receivables

Multiple unpublic nodes clients: Private settlement workflows for DvP

Latest developments:

On January 8, 2026, Rayls announced completion of a security audit by Halborn. This provides institutional-grade security certification for its RWA infrastructure, especially important for banks evaluating production deployment.

Additionally, the AmFi alliance plans to reach $1 billion in tokenized assets on Rayls by June 2027, with a reward of 5 million RLS tokens. AmFi, Brazil’s largest private credit tokenization platform, has brought immediate transaction volume to Rayls and set a detailed 18-month milestone. This is one of the largest institutional RWA commitments in any blockchain ecosystem to date.

Market targets and challenges:

Rayls’ target clients are banks, central banks, and asset managers requiring institutional privacy. Its public permissioned model restricts validator participation to licensed financial institutions, ensuring transaction confidentiality.

However, the challenge is demonstrating market traction. Without publicly available TVL data or announced client deployments outside pilots, the $1 billion AmFi target by mid-2027 will be a key test.

Ondo Finance: The Fastest Cross-Chain Expansion Race

@OndoFinance has achieved the fastest expansion from institutions to retail in RWA tokenization. Starting with a focus on government bonds, it has now become the largest platform for tokenized public stocks.

As of early January 2026:

Total Value Locked (TVL): $1.93 billion

Tokenized stocks: over $400 million, 53% market share

USDY holdings on Solana: approximately $176 million

I personally tested the USDY product on Solana; the user experience is seamless—combining institutional-grade government bonds with DeFi convenience, which is key.

Latest updates:

On January 8, 2026, Ondo launched 98 new tokenized assets covering stocks and ETFs in AI, EV, and thematic sectors. This is not small-scale testing but rapid expansion.

Ondo plans to launch tokenized US stocks and ETFs on Solana in Q1 2026, representing its most aggressive move into retail-friendly infrastructure. According to its roadmap, as expansion continues, it aims to list over 1,000 tokenized assets.

Industry focus:

AI sector: Nvidia, data center REITs

EV sector: Tesla, lithium battery manufacturers

Thematic investments: niche sectors traditionally limited by high minimum investments

Multi-chain deployment strategy:

Ethereum: DeFi liquidity and institutional legitimacy

BNB Chain: covering native exchange users

Solana: supporting large-scale consumer use with sub-second transaction finality

Honestly, Ondo’s TVL reached $1.93 billion even as token prices declined—that’s the most important signal: protocol growth takes precedence over speculation. This growth is mainly driven by institutional demand for government bonds and DeFi protocols’ need for idle stablecoin yields. The TVL increase during Q4 2025 market consolidation shows real demand, not just chasing market hype.

By establishing custody relationships with brokers-dealers, completing Halborn security audits, and launching products across three major blockchains within six months, Ondo has gained a competitive edge, making it difficult for rivals to catch up. For example, its competitor Backed Finance’s tokenized assets total only about $162 million.

However, Ondo faces some challenges:

Off-hours price volatility: Although tokens can be transferred anytime, pricing still depends on exchange hours, potentially creating arbitrage gaps during US night trading.

Regulatory constraints: Securities laws require strict KYC and accreditation checks, limiting the narrative of “permissionless” issuance.

Centrifuge: How Asset Managers Are Truly Deploying Billions

@centrifuge has become the standard infrastructure for institutional private credit tokenization. By December 2025, its TVL surged to $1.3–$1.45 billion, driven by actual deployment of institutional capital.

Major institutional deployments:

Janus Henderson partnership (a global asset manager with $373 billion AUM)

Anemoy AAA CLO fund: Fully on-chain AAA-rated collateralized loan obligation (CLO)

Using the same portfolio management team as its $21.4 billion AAA CLO ETF

Announced expansion plans in July 2025 to add $250 million on Avalanche

Grove Capital Allocation (an institutional credit protocol in Sky ecosystem)

Committed funds target: $1 billion

Initial startup capital: $50 million

Founding team from Deloitte, Citigroup, BlockTower Capital, and Hildene Capital Management

Chronicle Labs oracle partnership (announced January 8, 2026):

Proof of Asset framework: Provides cryptographically verified holdings data

Supports transparent NAV calculations, custody verification, and compliance reporting

Dashboard access for LPs and auditors

I’ve been following oracle issues in blockchain; Chronicle’s approach is the first to meet institutional needs—providing verifiable data without sacrificing on-chain efficiency. The January 8 announcement included a video demo showing this solution is already in practical use, not just future promise.

Centrifuge’s unique operation:

Unlike competitors that simply package off-chain products, Centrifuge tokenizes credit strategies directly during issuance. Its process:

Issuer designs and manages funds via a transparent, single workflow;

Institutional investors allocate stablecoins for investment;

Funds flow to borrowers after credit approval;

Repayments are proportionally distributed to token holders via smart contracts;

Annual yield (APY) for AAA assets ranges from 3.3% to 4.6%, fully transparent.

Supported multi-chain networks: Ethereum; Base; Arbitrum; Celo; Avalanche

The key is that asset managers need to prove on-chain credit can support deployment of billions, and Centrifuge has already demonstrated this. Its partnership with Janus Henderson alone provides hundreds of millions in capacity.

Furthermore, Centrifuge’s leadership in industry standards (co-founding the Tokenized Asset Coalition and Real-World Asset Summit) further cements its role as infrastructure, not just a single product.

Despite the $1.45 billion TVL indicating strong institutional demand, its target 3.8% annual yield appears modest compared to the higher risk and return opportunities historically seen in DeFi. Attracting DeFi-native liquidity providers beyond Sky ecosystem allocations will be a next challenge.

Canton Network: Wall Street’s Blockchain Infrastructure

@CantonNetwork is a response to institutional-grade, permissioned, privacy-preserving public networks supporting DeFi.

Participating institutions:

DTCC (Depository Trust & Clearing Corporation)

BlackRock

Goldman Sachs

Citadel Securities

Canton aims to handle the $37 trillion annual settlement flow processed by DTCC in 2024. Yes, that number is correct.

Canton Partnership (December 2025):

Partnership with DTCC is critical. It’s not just a pilot but a core commitment to building US securities settlement infrastructure. With SEC No-Action Letter approval, some US Treasuries held by DTCC can be tokenized natively on Canton, with plans to launch a controlled production MVP in early 2026.

Key details:

DTCC and Euroclear serve as co-chairs of the Canton Foundation;

They are not just participants but governance leaders;

Initially focusing on government bonds (lowest credit risk, high liquidity, clear regulation);

Post-MVP, potential expansion to corporate bonds, equities, and structured products.

Initially, I was skeptical about permissioned blockchains. But DTCC’s involvement changed my view. Not because of technical superiority, but because this is infrastructure that traditional finance will truly adopt.

Temple Digital Platform Launch (January 8, 2026):

Canton’s value proposition for institutions is further clarified by the launch of its private trading platform, Temple Digital. The platform is live, not “coming soon.”

Canton Network offers a sub-second matching speed central limit order book (CLOB), non-custodial architecture. Currently supports crypto and stablecoin trading, with plans to support tokenized stocks and commodities in 2026.

Ecosystem partners:

Franklin Templeton: manages $828 million in money market funds

JPMorgan: enables DvP settlement via JPM Coin

Canton’s Privacy Architecture:

Built on smart contract level using Daml (Digital Asset Modeling Language):

Contracts explicitly specify which participants see which data;

Regulators can access complete audit logs;

Counterparties can view transaction details;

Competitors and the public cannot see any transaction info;

State updates propagate atomically across the network.

For institutions used to confidential trading via Bloomberg terminals and dark pools, Canton’s architecture offers blockchain efficiency while avoiding exposure of trading strategies—making it particularly appealing. After all, Wall Street will never expose proprietary trading activities on a transparent public ledger.

Canton Network’s 300+ participating institutions demonstrate its appeal within the industry. However, much of the reported trading volume may be more pilot activity than actual production flow.

Current limitations include development speed: the MVP planned for delivery in early 2026 reflects multi-quarter planning cycles. In contrast, DeFi protocols often launch new products within weeks.

Polymesh: The Securities Blockchain Built for Compliance

@PolymeshNetwork stands out through protocol-level compliance rather than complex smart contracts. Designed specifically for regulated securities, Polymesh performs compliance verification at the consensus layer, avoiding reliance on custom code.

Core features:

Protocol-level identity verification: via licensed KYC providers;

Embedded transfer rules: non-compliant transactions are rejected at consensus;

Atomic payment and delivery (DvP): transactions settle within 6 seconds.

Production-grade integrations:

Republic (August 2025): supports private securities issuance;

AlphaPoint: over 150 exchanges across 35 countries;

Target sectors: regulated funds, real estate, corporate equity, etc.

Advantages:

No need for custom smart contract audits;

Protocol automatically adapts to regulatory changes;

Prevents non-compliant transfers.

Challenges and future:

Currently operates as an independent chain, isolating it from DeFi liquidity. To address this, an Ethereum bridge is planned for Q2 2026. Whether it will be delivered on time remains to be seen.

Frankly, I underestimated the potential of this “compliance-native” architecture. For security token issuers troubled by ERC-1400 complexity, Polymesh’s approach—embedding compliance directly into the protocol rather than relying on smart contracts—is more attractive.

How do these protocols carve up the market?

They do not directly compete because they address different issues:

Privacy solutions:

Canton: Daml-based, focused on Wall Street counterparties;

Rayls: Zero-Knowledge Proofs, providing bank-grade privacy;

Polymesh: Protocol-level identity and compliance.

Expansion strategies:

Ondo: manages $1.93 billion across three chains, prioritizing liquidity speed over depth;

Centrifuge: focuses on $1.3–$1.45 billion institutional credit market, prioritizing depth.

Target markets:

Banks/CBDC → Rayls

Retail/DeFi → Ondo

Asset managers → Centrifuge

Wall Street → Canton

Securities tokens → Polymesh

In my view, this market segmentation is more important than many realize. Institutions will not choose the “best blockchain” but the infrastructure that best solves their specific compliance, operational, and competitive needs.

Unresolved issues:

Inter-chain liquidity fragmentation:

Cross-chain bridging costs are estimated at $1.3–$1.5 billion annually. High bridging costs cause 1%-3% price gaps for the same assets across different chains. If this persists until 2030, annual costs could exceed $75 billion.

This is one of my biggest concerns. Even with the most advanced tokenization infrastructure, if liquidity is dispersed across incompatible chains, efficiency gains will be lost.

Privacy vs. transparency conflict:

Institutions need confidentiality for transactions, while regulators require auditability. In multi-party scenarios (issuers, investors, rating agencies, regulators, auditors), each party needs different levels of visibility. No perfect solution exists yet.

Regulatory fragmentation:

EU’s MiCA (Markets in Crypto-Assets Regulation) applies to 27 countries;

US requires case-by-case No-Action Letters, taking months;

Cross-border capital flows face jurisdictional conflicts.

Oracle risks:

Tokenized assets depend on off-chain data. If data providers are attacked, on-chain asset performance may reflect false realities. Chronicle’s Proof of Asset framework offers some solutions, but risks remain.

Path to hundreds of billions: 2026’s key catalysts

2026 catalysts to watch:

Ondo’s Solana launch (Q1 2026): testing whether retail distribution can create sustainable liquidity; success indicated by over 100,000 holders, proving real demand.

Canton’s DTCC MVP (H1 2026): validating blockchain’s feasibility in US Treasury settlement; if successful, trillions of dollars could move on-chain.

US CLARITY Act passage: providing clear regulatory framework; enabling hesitant institutional investors to deploy capital.

Centrifuge’s Grove deployment: $1 billion allocation within 2026; testing real capital flow in credit tokenization; smooth execution without credit events will boost asset managers’ confidence.

Market forecast:

2030 target: tokenized assets reach $2–4 trillion;

Growth requirement: from current $19.7 billion to 50–100 times;

Assumptions: regulatory stability, cross-chain interoperability readiness, no major institutional failures.

By industry growth projections:

Private credit: from $2–6 billion to $150–$2000 billion (small base, highest growth rate);

Tokenized government bonds: potential over $50 trillion if money market funds migrate on-chain;

Real estate: estimated $3–4 trillion (depending on whether property registration systems adopt blockchain-compatible titles).

Milestone for hundreds of billions:

Expected realization: 2027–2028;

Distribution:

Institutional credit: $30–$40 billion;

Government bonds: $30–$40 billion;

Tokenized stocks: $20–$30 billion;

Real estate/commodities: $10–$20 billion.

This requires a 5x increase from current levels. Though ambitious, considering the momentum in Q4 2025 and upcoming regulatory clarity, it’s not out of reach.

Why these five protocols are critical:

The 2026 institutional RWA landscape reveals an unexpected trend: no single winner, because no single market.

Frankly, this is exactly how infrastructure should evolve.

Each protocol addresses different issues:

Rayls → Banking privacy;

Ondo → Distribution of tokenized stocks;

Centrifuge → On-chain deployment for asset managers;

Canton → Wall Street infrastructure migration;

Polymesh → Simplified securities compliance.

From $8.5 billion at the start of 2024 to $19.7 billion now, the market size indicates demand has surpassed mere speculation.

Core needs of institutional players:

Finance executives: yield and operational efficiency;

Asset managers: lower distribution costs, expand investor base;

Banks: compliant infrastructure.

Next 18 months are critical:

Ondo’s Solana launch → testing retail scalability;

Canton’s DTCC MVP → testing institutional settlement;

Centrifuge’s Grove deployment → testing real capital in credit tokenization;

Rayls’ $1 billion AmFi goal → testing privacy infrastructure adoption.

Execution takes precedence over architecture; results matter more than blueprints. This is the key at present.

Traditional finance is moving toward a long-term on-chain migration. These five protocols provide the necessary infrastructure: privacy layers, compliance frameworks, and settlement infrastructure. Their success will determine the future path of tokenization—whether as an efficiency upgrade to existing structures or as a new system replacing traditional financial intermediaries.

The infrastructure choices made by institutions in 2026 will shape the industry landscape for the next decade.

2026 Key Milestones:

Q1: Ondo’s Solana launch (98+ stocks live);

H1: Canton’s DTCC MVP (US Treasury tokenization based on Wall Street infrastructure);

Ongoing: Centrifuge’s $1 billion Grove deployment; Rayls’ AmFi ecosystem development.

Trillions of assets are on the horizon.

NFA.