Tokenized real-world assets are often presented as a straightforward upgrade to traditional finance: move assets on-chain, increase liquidity, reduce settlement friction and unlock global access. In practice, most RWA initiatives stall not because of technical limitations but because the underlying infrastructure is misaligned with how regulated assets actually operate.
Real-world assets do not exist in isolation. They are governed by legal frameworks, accounting standards, reporting obligations, and jurisdictional constraints. When these assets are placed on blockchains designed primarily for open speculation, compliance is typically handled off-chain through contracts, custodians or manual oversight. This separation introduces fragility rather than efficiency.
The core issue is not tokenization itself, but enforcement. If regulatory rules are not enforced at the protocol level, they must be enforced externally. This creates a split system: on-chain representation paired with off-chain control. As scale increases, this model becomes harder to manage, audit and defend under regulatory scrutiny.
Native compliance infrastructure changes this dynamic. Instead of relying on intermediaries to police behavior after the fact, compliance constraints are embedded directly into how assets are issued, transferred and settled. This reduces ambiguity and ensures that on-chain activity reflects real-world legal conditions by default.
Another overlooked challenge is confidentiality. Many real-world assets involve sensitive information: ownership structures, transaction sizes, counterparty relationships and pricing terms. Full public transparency can conflict with confidentiality requirements and commercial realities. RWA-ready infrastructure must support privacy without undermining auditability allowing verification where required without indiscriminate exposure.
Dusk Network approaches real-world asset tokenization from this foundation. It is designed for regulated financial activity, where compliance, privacy and auditability are not competing goals but coordinated requirements. By enabling privacy-preserving verification and compliance-aware execution at the protocol level, Dusk allows assets to exist fully on-chain without relying on fragmented off-chain enforcement.
As the RWA narrative matures, the market is beginning to distinguish between experiments and infrastructure. Tokenization alone does not create viable financial products. Only systems that align legal reality, regulatory expectations and on-chain execution can support real-world assets at meaningful scale.
In that context, the future of RWAs will not be decided by who tokenizes first but by which networks are built to carry regulated assets responsibly from day one.
