SoK of RWA Tokenization: A Systematization of Concepts, Architectures, and Legal Interoperability

TL;DR

This paper systematically reviews RWA tokenization, highlighting its architecture, legal interoperability, and systemic challenges, and presents a case study on on-chain U.S. Treasuries.

Contribution

It offers a comprehensive taxonomy and analysis of RWA tokenization, addressing technical, legal, and systemic aspects, and compares different asset protocols.

Findings

RWA tokenization enables programmable, autonomous settlement of real-world assets.

Systemic constraints like latency and regulatory fragmentation impact tokenization.

On-chain U.S. Treasuries exemplify practical implementation challenges.

Abstract

The global financial architecture is undergoing a shift from intermediary centric-settlement to programmable infrastructure, to transmute trillions in static illiquid capital into active, high-velocity instruments. We argue that Real World Asset (RWA) tokenization represents a conceptual evolution beyond mere digitization, converting passive ledger entries into programmable economic agents capable of autonomous settlement and algorithmic collateralization. However, achieving such seamless capital efficiency necessitates resolving the fundamental friction between deterministic on-chain code and probabilistic off-chain reality, navigating the oracle problem and jurisdictional interoperability. This systematization of knowledge presents a taxonomy for the RWA lifecycle and deconstructs the multi-layered architecture, spanning legal custody, technical standards, and cryptoeconomic valuation, required to enforce off-chain rights within on-chain environments. We study systemic constraints such as latency and regulatory fragmentation through a comparative overview of sovereign debt, private credit, and real estate protocols, complemented by an empirical case study of on-chain U.S. Treasuries. We synthesize these findings to propose a prognostic outlook, positing that while asset tokenization provides a transitional bridge, it is not necessarily the inevitable shift compared to the emergence of unified, programmable ledgers.