Tokenization of Real Assets: How Blockchain Changes Ownership Rights

What Is Tokenization of Real Assets

Tokenization is the creation of a digital representation of a right to an asset or a related property right on a blockchain or another distributed ledger system. Simply put, a token is a digital record to which rights defined by contract or law can be attached.

Tokenization is not limited to crypto assets. The subject of the structure can be real estate, stocks, bonds, precious metals, credit claims, business shares, investment funds, and other assets. In professional circles, this field is often referred to as RWA – Real World Assets.

An important legal detail is that the token itself does not create ownership rights to the physical asset. It has value as a representation of rights only when there is a legally valid link between the blockchain record and the real asset.

The U.S. Securities and Exchange Commission (SEC) in its clarification on tokenized securities dated January 28, 2026, explicitly states that tokenized securities can have various structures and different sets of rights. Converting a security into a crypto asset format does not automatically change its legal nature.

How Tokenization Works in Practice

A typical process does not start with the blockchain but with a legal audit of the asset. It is necessary to establish the owner, encumbrances, the permissibility of fractional economic rights, and the legal mechanism for their transfer.

The process may then look like this:

1. The real asset and its owner are identified.
2. A legal structure linking the asset with the tokens is created.
3. The rights of token holders are determined – income share, claim rights, voting rights, redemption, or other rights.
4. A smart contract creates a specified number of tokens.
5. Tokens are distributed among investors according to established rules.
6. Subsequent transfers and operations are recorded on the blockchain.

After that, the blockchain can serve as a technological register of transactions. However, the legal owner of the property remains the person recognized by the relevant legislation and official registry.

What the Token Owner Actually Receives

This is where the most misunderstandings arise. Purchasing a real estate token does not necessarily mean buying 0.01% of an apartment.

Depending on the project structure, tokens may confirm:

• a share in a legal entity owning the asset;
• the right to part of the income from rent or use of the property;
• claim rights against the issuer;
• the right to redeem the token under certain conditions;
• a part of an investment or debt instrument;
• direct property rights, if permitted by the law of the specific jurisdiction;

Therefore, before purchasing, it is important to read not only the token description but also the issuer’s legal documentation. Particularly important is to determine who owns the underlying asset and what will happen to the tokens in case of bankruptcy of the platform or the issuing company.

Why the Market for Tokenized Assets Is Growing Rapidly

The RWA market already measures in tens of billions of dollars. Government and corporate debt instruments, fund shares, credit products, gold, real estate, and other asset categories are being transferred to blockchain.

The reason is simple. Tokenization allows for fractional economic rights, automation of some operations, and simplification of asset transfer between participants in the digital infrastructure.

Ethereum remains one of the key blockchains for RWA, but tokenized assets are also hosted on Solana, Stellar, BNB Chain, and other networks.

How Tokenization Changes Ownership Rights

The main change is not that blockchain abolishes ownership rights. It changes the way they are recorded, transferred, and used.

Fractionalization of Expensive Assets

A $10 million building can be economically divided, for example, into 100,000 digital units. An investor no longer needs to finance the entire property. They can acquire a set of rights corresponding to the number of tokens purchased.

However, token fractionalization and legal fractional ownership are not the same. If 1,000 tokens are linked to a building, it does not automatically mean the appearance of 1,000 co-owners of the real estate.

Automation of Transactions

A smart contract can execute an operation upon the occurrence of a specified event: receipt of payment, investor verification, or the other party fulfilling its obligations.

This mechanism allows partial consolidation of asset accounting, settlements, and enforcement of contract terms within one digital infrastructure. Programmability is considered one of the key features of tokenized financial instruments.

Why Blockchain Alone Cannot Replace a State Registry

Imagine an apartment in Ukraine divided into 1,000 tokens. Transferring 100 tokens to another person does not automatically make them the owner of 10% of the apartment.

For real estate in Ukraine, state registration rules for property rights apply. Therefore, for the Ukrainian market, it is necessary to distinguish two levels:

• blockchain records the token and transactions with it;
• the state registry determines the registered property right to real estate;
• a contract or corporate structure defines the link between the token and the underlying asset;
• the law defines which rights can be transferred and by what means;

Because of this, real estate tokenization is often constructed not as a direct digital division of the building, but through a legal entity or another structure that owns the asset.

Developing such a model requires separate verification of corporate agreements, investor rights, and regulatory requirements. On Poshuk.info, one can find information about legal services and consultations, and for structures related to collective investment, materials about business registration.

Tokenization in Ukraine: What the Legislation Says

The Ukrainian Law “On Virtual Assets” No. 2074-IX defines a virtual asset as an intangible good that is an object of civil rights, has value, and is represented by a set of data in electronic form. A virtual asset may also certify property rights, including claim rights to other objects of civil rights.

The current status of the document can be verified directly in the Law of Ukraine “On Virtual Assets” on the website of the Verkhovna Rada of Ukraine. As of September 2026, the official database notes that Law No. 2074-IX has not yet come into force.

Thus, for a Ukrainian project, it is not enough to simply issue tokens. It is necessary to separately analyze the nature of the asset, corporate legislation, rules on securities, financial monitoring, taxation, and state registration requirements.

If tokenization involves creating a separate company to own the asset, the legal entity’s structure also becomes a part of the model. For international projects, companies in various jurisdictions may be used, but the specific country must be selected after analyzing taxes, regulation, and investor rights.

How Tokenized Assets Are Regulated in the EU

The European approach clearly demonstrates the difference between a regular crypto asset and a tokenized financial instrument.

The MiCA regulation established harmonized rules in the EU for many crypto assets and providers of related services. However, tokenized securities and bank deposits do not become objects of MiCA just because they are transferred to blockchain.

The European Commission, in a material about DLT and tokenization of financial assets, explains that tokenized securities continue to be regulated by existing financial instrument legislation.

The EU also introduced the DLT Pilot Regime. This regime allows regulated participants to test trading and settlement with tokenized shares, bonds, and other financial instruments in a distributed ledger infrastructure.

Technology here does not abolish regulation. It changes the infrastructure.

Main Risks of Asset Tokenization

The tokenized model involves not only conventional investment risks but also technological, legal, and operational ones.

Before purchasing a token, it is worth checking:

1. Who legally owns the underlying asset.
2. What specific rights the token owner receives.
3. Whether the token can be exchanged for the asset or money.
4. What happens in case of issuer or platform bankruptcy.
5. Who holds the asset and confirms its existence.
6. Which law applies to the deal and where disputes will be resolved.
7. Whether licenses, KYC, AML, and other regulatory procedures are required.

Separately, one needs to assess risks from smart contract bugs, loss of private keys, platform hacks, insufficient liquidity, and discrepancies between blockchain information and the actual condition of the real asset.

This is precisely why tokenization does not eliminate the need for legal due diligence. On the contrary, the more complex the link between the token, the issuing company, and the physical asset, the more important it is to understand in advance what rights the token owner actually receives.