A question continues to define the trajectory of digital finance:

Can compliant tokenized assets scale on-chain?

Over the past few years, tokenization has seen significant growth. According to rwa.xyz, on-chain distributed assets total approximately $29.26B, while the total value of represented assets exceeds $368B. This disparity highlights a structural gap between issuance and distribution.

The same pattern appears in DeFi. Only a small fraction of RWAs are integrated into on-chain financial systems, with roughly $3B in total value locked. In other words, most tokenized assets remain isolated from the broader crypto economy.

Nearly 90% of tokenized assets are not actively circulating.

They exist on-chain, but they do not move.

Tokenization is not the bottleneck 

The industry has made meaningful progress in enabling compliant issuance. Across major jurisdictions, regulatory frameworks now provide pathways for tokenizing real-world assets under existing financial laws.

However, these frameworks introduce constraints on transferability.

In the United States, tokenized assets are regulated under securities law, with requirements such as registration or exemptions (e.g., Reg D, Reg S), KYC/AML compliance, and transfer restrictions often enforced through permissioned systems.

In the European Union, tokenized financial instruments fall under a combination of MiCA and existing securities regulations. Issuance is permitted through regulated entities, but secondary trading is typically limited to licensed venues, with cross-border fragmentation persisting.

Switzerland offers one of the most advanced legal frameworks, recognizing tokenized securities as enforceable on-chain claims. Even so, issuance and custody remain subject to regulatory oversight.

Similarly, in Singapore and Hong Kong, tokenization is supported within regulated environments, but access and transferability are constrained by licensing requirements and investor protections.

Across jurisdictions, a consistent pattern emerges: Tokenization is permitted, but unrestricted on-chain transferability is not.

Distribution is the missing layer

This core constraint in today’s RWA landscape directly impacts liquidity.

Without the ability to move across platforms and protocols, tokenized assets cannot integrate into DeFi. Without integration, they cannot become composable. And without composability, liquidity remains fragmented.

As a result, most RWAs remain siloed across platforms, jurisdictions, or permissioned networks. The bottleneck is not tokenization, but distribution.

Recent regulatory signals suggest this may shift. In the U.S., the SEC’s “Project Crypto” introduces the idea that regulatory obligations may not apply uniformly across all layers of the stack, potentially allowing compliance to be enforced at the asset level while keeping interface layers more open.

In parallel, jurisdictions such as Indonesia, through the OJK sandbox, are testing frameworks for compliant on-chain transfer of tokenized assets.

Historically, RWAs have faced a tradeoff: compliant assets are restricted, while composable systems are unregulated. This has limited both adoption and liquidity.

That constraint is beginning to converge. If compliance can be embedded at the asset layer, and transferability enabled within regulatory bounds, tokenized assets can begin to move across on-chain environments while remaining compliant.

Pruv Finance: enabling distribution by design

Pruv Finance is built around this principle.

Pruv has been approved under Indonesia’s OJK regulatory sandbox, greenlighting it to tokenize real-world assets within a supervised framework. What sets it apart is that assets tokenized by Pruv are designed to be transferable on-chain. This makes Pruv uniquely positioned in the current RWA landscape.

By embedding compliance at the point of issuance, Pruv ensures that assets are structured not just to exist on-chain, but to move and integrate with DeFi ecosystems.

Assets are no longer confined to a single platform or permissioned environment. Instead, they become portable, interoperable, and composable across on-chain financial infrastructure.

Expanding the largest asset class on-chain: private markets

A key question for Pruv is where to begin.

Pruv starts with private markets—one of the largest yet least accessible segments of global capital markets. Private market returns generally outperform public markets, with top-tier private equity delivering average annual returns of around 18%.

However, they have long been constrained by several structural limitations:

• Limited access, largely restricted to institutional investors and high minimum ticket sizes

• High friction, driven by intermediaries and cross-border complexity

• Low liquidity, despite strong underlying yield characteristics

• Limited transparency, higher fees, and additional investment requirements

Taken together, the combination of high returns, limited accessibility, and illiquidity makes private markets a natural candidate for on-chain transformation.

To date, Pruv has tokenized over 2.3 million of private market assets on-chain, including funds such as the Garuda Sports Fund, Simpan Dollar Income Fund, and Kaia Multifund. These products offer APYs of 8%–25%.

Pruv has integrated with multiple blockchain ecosystems, including Avalanche, Kaia, Stellar, and Pharos, with the next step focused on enabling on-chain distribution. This multi-chain approach improves accessibility, increases potential liquidity, and allows private market assets to participate in on-chain financial systems.

This marks a shift in how private markets are accessed and utilized. Rather than being confined to closed networks and intermediated channels, these assets can become programmable, accessible, and interoperable components of a broader financial stack.

Toward a more mature digital financial system

What is emerging is not just a new asset class, but a new financial architecture.

In this system, capital can move more efficiently, markets can form more quickly, and participation can expand beyond traditional boundaries.

The shift is already underway.

And it is being driven not just by tokenization, but by distribution.