What tokenization is, and what the token holds

On 13 November 2026 the data site rwa.xyz counted $13.86 billion of US Treasuries held through tokens, across 123 products and 86,349 holders. One of them, BlackRock’s BUIDL, held about $1.56 billion across 102 holding addresses. At the start of 2024 it didn’t exist.

Those tokens sit on public blockchains, and the funds in this course let them move only between approved wallets. Behind them sit Treasury bills and other holdings in a custodian’s account, and those stay put when a token moves. One stablecoin, Ethena’s USDtb, launched in 2024 with BUIDL as most of its reserve.

A tokenized asset is a record on a blockchain of a claim that lives in law. The chain shows who holds the token. A fund’s register, a company’s share book or a vault’s inventory shows what the token is a claim on, and the law of some country says whether that claim will be honored.

Franklin Templeton’s money fund, which Franklin calls the first US-registered fund to record its shares on a public blockchain, shows how the two layers fit. Its prospectus says “The Fund’s transfer agent maintains the official record of share ownership via a proprietary blockchain-integrated system”. The shares “are under the unilateral control of the Fund’s transfer agent”, which “has the ability to correct errors and unauthorized transactions in, and limit the transferability of, Fund shares”.

The transfer agent keeps the record, partly on a blockchain, and it holds the power to rewrite it. That’s the opposite of bitcoin, where the record is the asset and no company can rewrite it, and it’s the reason this course keeps asking what sits behind the token rather than which chain it’s on.

Gold tokens work the same way. Paxos says “Every PAXG token is backed by one fine troy ounce of London Good Delivery gold held in custody by Paxos Trust Company, N.A.”

The gold is the asset. The token is your receipt, and the custody agreement is what makes the receipt worth anything. Lesson 3 sets that beside Paxos’s redemption terms.

Selling small slices of a big asset to people who can’t run it themselves is older than the internet.

When token sales boomed in 2017, the SEC’s report on The DAO applied it directly: tokens “offered and sold by a ‘virtual’ organization known as ‘The DAO’ were securities”, and “issuers of distributed ledger or blockchain technology-based securities must register offers and sales” unless an exemption applies.

The firms that manage the assets started issuing the tokens. Franklin Templeton’s fund went live in 2021, and BlackRock launched BUIDL on 20 March 2024 with a $5 million minimum, open only to the wealthiest class of investor under US law.

Then the plumbing followed.

The Depository Trust Company, the central depository that records which broker holds which US shares and Treasuries, won a no-action letter from SEC staff on 11 December 2025 letting its members hold entitlements to them as tokens, and its service went live on 28 October 2026. On 18 March 2026 the SEC approved Nasdaq’s rule to trade tokenized shares on the same order book as ordinary ones, and on 17 September it gave new on-chain venues a temporary exemption. Lesson 2 goes through each of these.

In March 2026 the SEC said “A security is a security regardless of whether it is issued, or otherwise represented, offchain or onchain.” The issuers changed, and that rule didn’t.

Both aim to stay at a dollar.

BUIDL’s launch announcement says the fund “seeks to offer a stable value of $1 per token and pays daily accrued dividends directly to investors’ wallets as new tokens each month”. Securitize moved the payment to daily, Monday to Friday, in January 2025.

The Stablecoins course, lesson 1, explains why a tokenized money fund turns up on stablecoin lists without being one. This course is about the fund side of that line.

BUIDL’s 102 holding addresses average about $15 million each, and rwa.xyz lists the fund as closed to US individuals. Franklin’s fund shows a retail version exists for US investors: its prospectus sets the “minimum initial purchase for most accounts” at $20.

For an ordinary holder, the point of understanding tokenization is defensive. The reserve behind your stablecoin, the collateral behind a lending protocol and the “stock” a broker offers you as a token are all claims of this kind, and each one is only as good as the structure behind it. Lesson 4 gives you the checklist.

Lesson 2 of Stablecoins shows how to read a reserve report, and lesson 4 of How DeFi Works shows what collateral does in a lending pool.

Last checked: 13 November 2026

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Nothing in the Learning Lab is financial advice.