Changpeng Zhao warns: liquidity fragmentation is the main threat to asset tokenization
Binance founder Changpeng Zhao (CZ) has once again drawn attention to the rapidly growing market for tokenization of real-world assets (RWA). However, unlike many enthusiasts, he emphasizes not the growth potential, but the systemic risk that could slow down the development of the entire industry.
In my observation, interest in tokenization is currently experiencing a real boom: the total value of real-world assets issued on the blockchain has reached $38.4 billion, increasing by 2.16% over the last 30 days. At the same time, the number of holders of such tokens has jumped by an impressive 79.74%, reaching 2.379 million. These figures clearly demonstrate that institutional and retail investors are increasingly viewing blockchain as legitimate infrastructure for traditional finance.
Global tokenization as a tool for attracting capital
Zhao consistently promotes the idea of using tokenization for states. He advises the authorities of Pakistan and Kyrgyzstan on digital asset regulation, suggesting they consider issuing tokenized shares as a mechanism for attracting foreign direct investment (FDI). In his logic, this opens access for countries to a global pool of capital without traditional intermediaries.
"Tokenization is one of the best ways for countries to 'raise money' or increase FDI," he emphasizes. It is hard to argue with this: the issuance of tokenized securities does indeed lower entry barriers for international investors.
The risk of fragmentation: the main stumbling block
However, Zhao's main thesis, which I consider particularly important, concerns not the advantages but the threats. He warns: issuing assets on multiple blockchains at once inevitably leads to the fragmentation of liquidity. This is not just a theoretical concern — the problem has already been recognized by key players in financial infrastructure.
Clearstream, DTCC, and Euroclear, together with Boston Consulting Group, dedicated a separate report to this issue. Their conclusion is unequivocal: fragmentation "locks" assets in isolated pools, increasing operational costs and reducing market efficiency. If each issuer chooses its own network without proper interoperability, we risk getting a fragmented landscape where liquidity is dispersed rather than concentrated.
Zhao himself remains optimistic, arguing that over time issuers will learn to interact with each other, and the problem will be resolved. "Fragmentation can be partially solved if there is high interchangeability between different issuers, and this is important," he writes.
My view on the situation
Support for tokenization from figures such as Zhao and Robinhood CEO Vlad Tenev suggests that the industry is moving in the right direction. However, I believe that without unified interoperability standards, the market risks repeating the mistakes of the early days of DeFi, when fragmented protocols created inefficient trading conditions. The question is not whether tokenization will develop, but whether the industry can consolidate quickly enough to realize its full potential. Investors should closely monitor the development of cross-chain solutions — they will become the key success factor in the coming years.