Tokenization and RWA sector challenges

The tokenization and real-world asset (RWA) sectors are encountering significant legal and operational hurdles. Initial concerns focused on the lack of direct creditor rights for investors in RWA credit vaults. Because underlying loans and collateral are often held by separate entities from the platforms providing yield-bearing stablecoins, investors may lack enforceable claims against actual borrowers. Additionally, the tokenized stock market has struggled with infrastructure issues, such as platforms failing to maintain sufficient actual shares to meet demand for private company tokens.

As the market expands, new challenges regarding shareholder rights have emerged. Specifically, there is a growing difficulty in exercising voting rights when tokens are held in wallets that have not undergone Know Your Customer (KYC) verification. This creates a disconnect between on-chain records and official legal registries. To mitigate risks like double voting or the loss of corporate rights, industry leaders have suggested issuer-led models that use smart contracts to restrict token transfers to verified wallets, ensuring blockchain records remain synchronized with official shareholder registries.