Developing Economies to Lead Adoption of Tokenized Real-World Assets

The prediction that developing economies without entrenched financial market infrastructure will adopt tokenized real-world assets before developed countries hinges on several structural and economic dynamics. In many emerging markets, the absence of legacy systems creates an opportunity for leapfrogging to modern, blockchain-based solutions that can lower costs, expand access, and increase transparency. This article explores the drivers, technical enablers, market consequences, and risks associated with this potential shift.

Structural advantage: Countries with limited or fragmented traditional financial infrastructure face high entry barriers for small and medium-sized investors. By contrast, tokenization can fractionalize ownership, enabling an expanded investor base. Without the burden of retrofitting legacy systems, market participants in these regions can adopt standards, wallet-based custody, and decentralized settlement more rapidly, capturing a first-mover advantage in new asset classes such as tokenized real estate, commodities, and invoices.

Cost and efficiency: Tokenized assets can significantly reduce frictional costs related to settlement, reconciliation, and intermediaries. For economies where banking and settlement networks are expensive or unreliable, the promise of near-instantaneous settlement and programmable assets can be transformative. Stablecoins, local digital payment rails, and interoperable token standards will be important complements to widespread adoption.

Regulatory flexibility and experimentation: Emerging jurisdictions may adopt lighter, innovation-friendly regulatory frameworks that encourage pilot programs and public-private partnerships. While this can accelerate adoption, it also places a premium on clear legal frameworks for custody, property rights, tax treatment, and cross-border transfers. Policymakers will need to balance innovation incentives with investor protection and anti-money laundering safeguards.

Mobile-first adoption: Many developing economies are mobile-first environments where smartphone penetration outpaces access to traditional banking. Tokenized assets delivered via mobile wallets and accessible interfaces can democratize investment, unlocking capital formation for local projects and small businesses. This dynamic can boost financial inclusion while simultaneously creating new liquidity pools for global investors.

Technical enablers and interoperability: The success of tokenized real-world assets depends on robust oracles, standardized token schemas, custody solutions, and connectivity with off-chain legal records. Projects that prioritize interoperability, secure key management, and regulatory-compliant onramps will be best positioned to scale in emerging markets. Public-private collaboration on infrastructure standards will accelerate trust and adoption.

Risks and mitigations: Rapid adoption in less mature markets raises concerns about fraud, inadequate investor education, and regulatory arbitrage. Effective mitigations include mandatory disclosure standards, escrowed token issuance, local market maker programs to improve liquidity, and international cooperation on cross-border regulation. Development finance institutions and multilateral organizations can play a constructive role in capacity building and risk-sharing.

Market implications: Early adoption by developing economies could reshape global capital flows, redirecting institutional interest toward tokenized instruments tied to high-growth regions. Traditional financial centers may respond by offering custodial and compliance services, while technology providers will need to tailor solutions for low-bandwidth, mobile-first contexts.

Conclusion: The convergence of mobile access, regulatory flexibility, and the relative absence of legacy constraints gives many developing economies a real chance to lead in tokenizing real-world assets. Stakeholders—policymakers, fintech companies, and investors—should prepare by focusing on interoperability, strong legal frameworks, and investor protection to ensure that the potential benefits are realized responsibly and sustainably.