The tokenization of real-world assets (RWAs) enters a new cycle of competition with Ondo Finance and Pantera Capital launching a $250 million Catalyst fund, Abu Dhabi listing the Middle East's first blockchain bond, and the UK and Singapore further deepening their regulatory partnership. With the RWA tokenization market valued at a record $24 billion—380% higher than in 2022—the traditional finance incumbents and crypto-native players are hot on the heels to grow from pilot programs to institutional-scale solutions. The Ondo's $250M Fuel for RWA Arms Race Ondo Finance, a leader in tokenized U.S. Treasuries, and Pantera Capital, one of the most prominent crypto VCs, have partnered up to introduce the Ondo Catalyst fund. The $250 million fund will invest in equity and tokens in protocols, platforms, and infrastructure underlying on-chain capital markets. ”We are seeing a bit of an arms race right now,” Ondo's chief strategy officer Ian De Bode said, referring to the influx of companies and exchanges diving into the tokenization market. The fund has a two-sided emphasis: Protocols & Platforms : Investing in DeFi protocols and developer platforms supporting tokenized RWAs. Infrastructure : Investing in custody, compliance, and interoperability infrastructure to bring tokenized assets more broadly and securely within reach. Pantera's strategic capital and extensive technical expertise are set to scale next-generation financial applications, optimizing utility, scalability, and adoption. ”Tokenization of traditional financial assets is the biggest change in infrastructure since electronic trading,” said Pantera's Paul Veradittakit. Abu Dhabi and the UK-Singapore Agreement: Bond Pilots Live Middle East is also setting history: First Abu Dhabi Bank (FAB) has issued the Middle East's first digital bond on HSBC's Orion platform, listing on the Abu Dhabi Securities Exchange (ADX). The blockchain-born bond, available to investors globally through Euroclear, Clearstream, and Hong Kong's CMU, demonstrates the speed of digital bonds in operations—faster settlement, reduced counterparty risk, and enhanced transparency. ADX CEO Abdulla Salem Alnuaimi called it a ”defining moment” paving the way for tokenized sukuk, green bonds, and real estate products. HSBC, the sole bookrunner and coordinator, says the move ”makes the promise of tokenization a reality for our region.” Meanwhile, the UK and Singapore reaffirmed their backing of Project Guardian, an initiative to test the reality of tokenized financial assets. The next phase will see greater collaboration with industry groups and efforts in cross-border trading via shared ledgers, reducing technical and regulatory barriers. Comparing Models Ondo Catalyst targets both equity and token investments, aiming for yields competitive with traditional finance but with 24/7 liquidity and programmable features. Ondo’s OUSG and USDY tokens already offer exposure to U.S. Treasuries, with nearly $1.4 billion in market cap. Abu Dhabi’s digital bond offers institutional-grade access, faster settlement, and is designed to attract global investors through established custody networks. UK-Singapore Project Guardian is all about interoperability, aiming to make investors seamlessly trade tokenized assets across borders. Middle East (Bahrain, Saudi Arabia, Kuwait) and Asian regulatory sandboxes are inducing innovation by facilitating fintechs to test tokenization solutions in real-world environments—balancing compliance with accelerated product development. Can Regulation Keep Pace With Investor Demand? While tokenization moves from pilots to competition, the regulatory landscape is changing fast. The U.S. is increasingly embracing tokenized securities, while the UK, Singapore, and Abu Dhabi are creating frameworks to draw in international capital. However, the pace of innovation is stretching rules to the limit, raising new issues around custody, secondary trading, and cross-border compliance. Industry leaders believe that regulatory clarity and robust infrastructure will be the enablers of unlocking trillions of tokenized assets. “At some point, the question is going to be, ‘Why would I hold my asset off-chain in a brokerage account?’” said Ondo’s De Bode. Bottom Line With $250 million of new capital, digital bonds are now in the Middle East, and cross-border regulatory deals, tokenization of physical assets is leaving pilot phases and entering a global race. With yields getting better, access, and infrastructure, the battle is on to see which models—and which markets—will define the next generation of tokenized finance.
