The Gulf Cooperation Council (GCC) is rapidly becoming one of the world's most ambitious regions for real-world asset (RWA) tokenization.
Abu Dhabi's Mubadala Capital tokenized a private markets fund, Saudi Arabia completed the world's first sovereign-native tokenised property title deed transfer, while Qatar is preparing to tokenise real estate.
But ask an investor in any of these deals what they actually own, and the answer never stays the same. Is it a claim on the underlying asset or the issuer's promise? If the platform goes dark, does ownership survive, or does it depend entirely on a company staying solvent? And when something goes wrong, who is liable?
The truth is that "tokenized asset" is not a single product with one set of ownership rights. It is a label currently stretched across 13 structurally different financial instruments, each with different ownership rights. As the industry moves from pilot projects toward institutional-grade adoption, closing the gap between the label and what tokenisation actually means becomes the real problem.
Tokenized asset ownership is grouped into one category
A token can represent the asset itself, a legal claim on that asset, or simply a claim on another institution's promise regarding that asset. Those are fundamentally different forms of ownership, yet they are routinely discussed as though they are interchangeable, or worse, the same.
That distinction matters because blockchain solutions do not expose the whole story. Ownership often depends on legal agreements, custodians, issuers, registries and courts that exist entirely off-chain. If a platform fails, an issuer becomes insolvent, or a custodian disappears, the rights attached to the token may look very different from what investors assumed they had purchased.
The industry uses the term “tokenized asset" to describe one product, when in reality it is not. The RWA.xyz dashboard, for example, shows the “Real World Assets" category currently covers at least 13 structurally different financial instruments, including stablecoins, which are a very different product.
Excluding stablecoins, the tokenised RWA market sits above $36 billion. Including stablecoins, that figure surpasses $340 billion. According to RWA.xyz, that $36 billion figure breaks down into 12 separate categories: US Treasury debt, commodities, asset-backed credit, specialty finance, non-US government debt, stocks, active strategies, venture capital, corporate credit, diversified credit, real estate, and private equity. Stablecoins are a different product entirely.
Take three examples. First, a tokenised US Treasury issued by Ondo. Second, a tokenised Iowa farmland fund. Third, a tokenized share of a Warhol silkscreen. They all live on the same blockchain, clear through similar infrastructure, and show up in the same RWA market tallies.
Yet, they have almost nothing else in common. One is a claim on a security held by a custodian who owes the holder a cash flow, the farmland is a limited partnership that owns land and distributes proceeds, and the artwork is a Limited Liability Company LLC) that owns a painting, where the holder owns nothing tangible until a majority votes to sell.
Each one is a completely different product, with a completely different failure mode, and yet all of them count as "real-world asset tokenization”.
Ownership can mean different things
The ownership question doesn't have a single answer. Tokenized products actually split into four categories, based on when ownership legally transfers and which institution validates, or authorises, that change.
These groups include:
- Referential tokens, most popularly used by stablecoins, record a balance on a ledger while economic settlement happens somewhere else, usually when an issuer honors a redemption.
- Contractual tokens carry enforceable rights defined by legal agreements, with completion running through the courts rather than the ledger, as the farmland and Warhol examples reflect.
- Title tokens appear in jurisdictions that have recognized the on-chain ledger as the authoritative ownership register, as Switzerland's DLT Act and Germany's electronic securities regime have done.
- Atomic tokens are those where the ledger operation itself completes the transfer, because the asset does not exist anywhere else. Bitcoin and Ether fit into this category, but almost no real-world asset currently does or can because assets have real world legal foundations.
In fact, almost every tokenised RWA asset on the market today sits in the first two groups. Their pricing, marketing, and increasingly, regulation treat all four as interchangeable. Even when they’re clearly not.
The consequences are already here
The gap between what a tokenised product is called and what it actually contains is not theoretical. It already causes real loss.
When Silicon Valley Bank failed after a bank run in March 2023, Circle disclosed that $3.3 billion of USDC reserves were held at the bank. Within hours, USDC fell to around $0.87. Nothing failed on-chain. Smart contracts functioned normally and the blockchain continued processing transactions exactly as designed. What failed was the off-chain dependency supporting the product.
Many holders believed they owned digital dollars. In reality, they held a claim whose value depended on Circle's ability to recover reserves from a commercial bank.
The same principle applies across tokenised credit, private equity, real estate and infrastructure. Every product relies on a different combination of legal rights, counterparties and institutions that determine what investors ultimately own when markets come under stress.
Why this matters for the GCC
The issue becomes increasingly important as the GCC moves from pilots to institutional-scale tokenisation.
The region is seeking to become a global leader in digital capital markets. Sovereign wealth funds and financial institutions are investing heavily in tokenised funds, property, and other real-world assets. However, many of these products still fail to clearly communicate what investors actually own.
If two products are both described as "tokenised real estate" but one represents direct legal title while the other merely represents a contractual claim administered by an intermediary, investors should not have to discover that distinction only after something goes wrong.
What needs to be done
The quickest fix is shared vocabulary. Starting with disclosure, every tokenised product should answer three questions in plain language, on its front page. These include:
- What changes when the token moves?
- What further action (if any) makes that change take effect?
- Who has the authority to validate the transfer?
MiCA and Singapore's Project Guardian both point in the right direction by classifying where completion sits, not just by what the asset is. A token that settles on the ledger is a different supervisory object from one that depends on a countersignature two systems away.
Tokenization is going to continue its explosive growth. Whether the next phase earns institutional trust comes down to whether the industry is willing to be specific about where the 13 products that are currently bundled under the "real-world assets" category sit within a clear taxonomy.