The issuance of digital tokens representing rights in off-chain assets. The token is a record on a ledger; the asset — a Treasury bill, a building, a gold bar — stays where it is, held by a custodian under a legal structure that defines what the holder can claim. Tokenisation moves the record, not the asset. The market shortens the instruments to RWAs and the activity to tokenized real-world assets; under either name, what the holder acquires is fixed off the chain, by that structure.
Why the market has two totals and not one
Since November 2025 the sector’s reference registry, RWA.xyz, has published two figures instead of one, separated by two questions: can the token leave the platform that issued it, and can it move directly between wallets. Tokens that pass both are distributed. Tokens that fail either are represented. On 22 August 2026 the registry showed $38.40 billion distributed against $342.63 billion represented, across 1,716 distributed assets and 4,285 represented ones. The two figures are not additive and do not describe the same activity.
Represented assets are ledger bookkeeping. An existing instrument, held inside its issuer’s own system, is recorded on a chain for reconciliation and operational efficiency. The holder’s position is what it was before; the ledger changed how it is administered, not what it is. Distributed assets behave the way tokenisation is usually described — held in a wallet the issuer does not operate, movable to another holder, subject to whitelist and eligibility controls.
The represented total is close to nine times the distributed one, and represented assets outnumber distributed ones more than two to one. The largest single tokenised asset by value is a credit product that cannot leave the platform that issued it. Anyone reading a headline market size is reading, for the most part, a records upgrade inside institutions that already held the assets.
What the token is actually attached to
Four structures account for nearly everything in issue. They are not variations on a theme; they give the holder materially different positions.
Direct issuer obligation. The issuer holds the asset and undertakes to honour the token, commonly by delivering the asset or its cash value on redemption. The holder’s position is a contractual claim against that issuer, ranking with its other obligations. This is the standard structure for commodity-backed tokens.
Fund or share wrapper. The token records a holding in a fund, and the fund holds the assets. The holder is an investor in the fund with the rights the fund documents give. Where the ledger is the fund’s official system of record, the token is the register entry; where it is not, the token mirrors a register kept elsewhere, and the register governs.
Special-purpose vehicle. An SPV or trust holds one asset — a property, a loan portfolio — and the token records an interest in the vehicle. The holder owns a share of the entity that owns the asset, which is a different position from owning the asset.
Native issuance. The instrument is created on the ledger under a regime that recognises it, with no paper original behind it. This is the smallest of the four in practice, and the only one where the on-chain record is the primary legal record by design rather than by contract.
In three of the four, the ledger sits downstream of a legal document. It records the position; it does not create it.
How a tokenisation is assembled, and who does each part
- Rights definition. The sponsor fixes what is being tokenised: the asset itself, an economic interest in it, or a claim on an entity that holds it. This decision, not the technology, determines everything the holder later has.
- Legal wrapper. Counsel builds the structure — issuer undertaking, fund, SPV — under a chosen governing law, with offering documents stating redemption terms, transfer restrictions and the position on insolvency.
- Custody. A custodian takes the asset. For physical commodities that means a vault operator and a storage agreement; for securities, a securities custodian. The custodian’s terms, not the token’s, govern liability and insurance.
- Issuance. Tokens are minted against the recorded holding, generally with a smart contract enforcing transfer rules: whitelists, jurisdiction blocks, lock-ups.
- Distribution. Tokens are placed with holders. Whether they can subsequently leave the issuing platform is decided here, and this is what puts the asset on the distributed or the represented side.
- Servicing. Someone values the asset, publishes reserve or holdings reporting, processes corporate actions, and pays whatever the instrument pays.
- Redemption or wind-down. The holder presents tokens and the issuer performs, or the structure terminates and the assets are realised under the wrapper’s terms.
Steps 1 to 3 decide what the holder owns. Steps 4 and 5 decide how it moves. Diligence that begins at step 4 has skipped the steps that set the position.
Where the commodity slice actually stands
On 21 August 2026 the tokenised commodity class held $5.06 billion distributed and $3.19 billion represented across 93 products, with roughly 305,000 holders and monthly transfer volume of $5.87 billion. That is the smallest of the major asset classes on the registry.
Concentration inside it is extreme: two products carry approximately 93% of the distributed figure. Gold is the underlying in the large majority of the class; silver, platinum-group metals, oil, diamonds and agricultural commodities occupy the remainder, one to two orders of magnitude below. In practical terms, “tokenised commodity” and tokenised gold are close to the same statement, and the dominant structure is the direct issuer obligation described above. The holder’s position under that structure is set out at Tokenised gold; the issuance mechanics are at Gold tokenization.
What governs redemption
Redemption is where a token either resolves into the asset or does not, and every component of it is a term in the issuer’s documents rather than a property of the token.
- Who owes performance. The issuer, not the custodian and not the chain. A custodian confirming that metal exists is not a party undertaking to deliver it to a token holder.
- Eligibility. Redemption is generally gated by onboarding with the issuer and restricted by jurisdiction. Holding the token and being eligible to redeem it are separate conditions, and the second can be lost after the first is acquired.
- Minimum unit. Physical redemption is settled in whole deliverable units. A holding below one unit of the underlying cannot be redeemed in kind, whatever the nominal backing per token.
- Fees and delivery point. The issuer states where the asset is released and who bears carriage, insurance and duty from that point onward.
- Timing and suspension. Notice periods, settlement windows and the issuer’s reserved right to suspend redemption are all documented terms.
No figures are given here because each is issuer-specific and revisable; they are read from the current terms of the specific instrument. Two tokens with identical stated backing routinely carry different redemption positions. The mechanism itself is defined at Redemption right.
What evidence a tokenised position produces
On-chain data evidences the record: issuance, total supply, holder addresses, transfer history. It is complete, timestamped and independently readable, and it says nothing about the asset. Nothing observable on a chain confirms that a bar exists, that it is unencumbered, or that it is not also recorded against someone else.
The asset side is evidenced off-chain, by three documents of different weight. Offering documents state what the issuer undertakes. A reserve statement asserts aggregate holdings against outstanding obligations at a stated moment. An attestation reports what an independent party observed at a point in time and is narrower than an audit opinion, which addresses the fairness of financial statements.
The gap this leaves is specific. A counterparty’s auditor can reconstruct a token balance and an issuer’s published aggregate. What the combination does not produce is a line from this holder to identified units of the asset — which is the reconciliation an allocated position produces as a matter of course, and the one a fungible claim structurally cannot.
What goes wrong
The issuer fails. The token is a claim on the issuer. Unless the wrapper has effectively separated the assets from the issuer’s estate, the holder ranks with other unsecured creditors and holds a claim in an insolvency rather than an asset outside it. This is the pivot the whole category turns on, and it is set out at Issuer claim.
The wrapper and the forum do not align. The structure is drafted under one law, the asset sits in another, and enforcement happens where the asset is. Where the two do not meet, the holder’s remedy is a claim to be pursued in the place the asset sits, under law that may give the on-chain record no evidential weight at all.
Exit turns out not to exist. A represented asset cannot leave its platform by construction. A distributed asset can move but may still have no depth. Across the commodity class, monthly transfer volume slightly exceeds total distributed value, but that turnover sits in the same small number of products that hold the value; outside them, a position is movable in principle and unsellable in practice.
Eligibility changes after purchase. Whitelists are administered by the issuer. A holder who falls outside the transfer rules keeps the token and loses the ability to move it — the position is intact and frozen.
The custodian’s terms govern the loss. Liability limits, insured value, valuation date and named perils come from the storage agreement between the issuer and the operator. A token holder is generally not a party to it and cannot claim under it directly.
The record and the register diverge. On-chain supply asserts one figure; the custodian’s register holds another. Reconciliation happens off-chain, on the issuer’s reporting cycle, and a divergence is visible only when that cycle runs.
Which body of law makes an electronic record carry title
Two separate bodies of law bear on a tokenised asset, and almost every product in issue sits inside the first and outside the second.
The first governs the token as property in its own right. In the United States, the 2022 amendments to the Uniform Commercial Code added Article 12, which creates a new category of personal property — the controllable electronic record — and makes control the functional equivalent of possession for records that qualify. A purchaser taking control for value, in good faith and without notice, takes free of competing claims. More than thirty states and the District of Columbia have enacted the amendments; New York’s enactment took effect on 3 June 2026. Article 12 is a developed answer to what a token is, and it expressly excludes records already governed by other parts of the Code.
The second governs whether an electronic record moves goods. For goods in storage the instrument that carries title has always been the document of title — the warehouse receipt, the bill of lading — where transferring the document transfers the right to the goods. Putting that instrument into electronic form requires legislation giving an electronic record functional equivalence with its paper original. The UNCITRAL Model Law on Electronic Transferable Records, adopted in 2017, is that legislation, and warehouse receipts and bills of lading are inside its scope. UNCITRAL records legislation based on or influenced by it in 13 States and 13 jurisdictions — two of them partial, one covering bills of lading only and one bills of exchange only — and the Secretariat’s own note observes that enactment is not entry into force. Unlike Article 12, the Model Law creates no new asset class; it defers to the law under which each instrument already works on paper.
The consequence is precise. Article 12 tells a court what the token is. Document-of-title law tells a court whether an electronic record moves the goods. A commodity token is normally issued under neither a document-of-title regime nor as a document of title, so transferring it transfers the token, while the link to the metal is carried by a contract with the issuer and by whatever register the custodian keeps. The diligence question on a tokenised position is therefore not whether the asset exists — it usually does — but which register a court would read, and what that register says about this holder.
An allocated bullion position answers that question in the register rather than on a chain. Bars are identified by serial number, weight, fineness and refiner in the Allocation Record; the metal sits in a dedicated client sub-account at Brink’s Hong Kong or Singapore, named in the vault register, allocated by serial number and segregated from Golden Ark Reserve’s own stock and from other counterparties’ metal, not used and not pledged. The position is evidenced by contract, allocation record and the vault’s placement confirmation, and it does not depend on any jurisdiction having enacted a model law for electronic records. Golden Ark Reserve issues no token and no claim on metal.
Terms it is confused with
| Term | What the holder holds | What the position depends on |
|---|---|---|
| Real-world asset tokenisation | The category: tokens recording rights in off-chain assets | The wrapper chosen for the specific product |
| Tokenised gold | A token issued against gold held by an issuer | The issuer’s solvency and its stated redemption terms |
| Gold-backed token | The same structure under a different label | The issuer’s solvency and its stated redemption terms |
| Gold-backed stablecoin | A token referencing a gold price, presented as stable-value | The issuer’s solvency and the reference it maintains |
| Digital gold token | The phrase covers both issuer-backed instruments and price-referencing products | Whichever of the two the specific product is |
| Allocated gold | Specific bars by serial number, segregated and recorded | The allocation record and the storage arrangement |
| Unallocated gold | A quantity owed, not identified metal | The obligor’s solvency |
One further distinction is worth stating directly, because it is where the two families genuinely part. A token freely transferable to any eligible wallet approaches a bearer position: the rights follow whoever controls the record, and the issuer’s register of holders is derived from the chain. An allocation register works the other way — it names the holder against identified bars, and control of a device or a key changes nothing about who is named.
Where a position is held as identified bars rather than as a token, the mechanics of placement, segregation and documentation are set out at Allocated Gold Storage and Vault Placement.