“Tokenization” gets thrown around like it’s a magic switch. Put assets on a blockchain, press a button, and suddenly capital flows in. That’s the pitch. Reality is more grounded, and that’s a good thing.
For large funds and crypto-native players, tokenization has been experimental for years. For small and mid-sized enterprises, the question is simpler and more brutal: does this actually help me raise money, lower my cost of capital, or improve liquidity? Or is it just a glossy PDF with no execution behind it?
Let’s separate noise from substance.
What Real World Asset Tokenization Actually Means
Real World Asset tokenization is not about inventing value. It is about representing existing, legally enforceable assets in digital form. Equity, receivables, inventory, commodities, real estate, revenue streams. The asset exists first. The token is just a wrapper.
A properly structured token mirrors real rights: cash flows, security interests, or economic exposure. If those rights are weak or unclear off-chain, the token does not fix that. It just makes the weakness visible faster.
If you want a clean, operational overview of how the process works step by step, this guide by Financely Group lays it out clearly.
Why SMEs Are Interested (And Why Many Get Burned)
SMEs look at tokenization for three reasons:
First, access to capital. Banks are slow, private credit is selective, and equity dilution is painful. Tokenization sounds like a third door.
Second, liquidity. Selling a portion of future cash flows or assets without giving up control is appealing.
Third, speed and reach. Digital issuance feels global by default.
Where it breaks down is execution. Many SMEs are sold a “platform” without underwriting, distribution, or legal enforceability. They end up with tokens nobody can buy, or worse, tokens that create regulatory and legal risk without raising a single euro.
Tokenization without capital markets thinking is just tech cosplay.
When Tokenization Can Actually Make Sense for SMEs
Tokenization becomes interesting when three conditions are met.
One: the underlying asset is boring but predictable. Think receivables, contracted revenues, inventory with turnover, or stabilized real assets. Volatility kills investor appetite, regardless of how modern the wrapper looks.
Two: the structure mirrors familiar financing logic. Investors still think in terms of yield, risk, seniority, and downside protection. Tokens that behave like structured debt or participation notes are far easier to place than vague “utility” constructs.
Three: there is real distribution. Not followers, not Discord members, not promises. Actual investors who can write checks, pass KYC, and accept the risk.
Without those three, tokenization is just a branding exercise.
Regulation Is Not Optional, No Matter What Twitter Says
A common myth is that tokenization somehow sidesteps regulation. It does not. In most jurisdictions, tokenized assets fall under existing securities, commodities, or collective investment rules.
For SMEs, this matters because non-compliance can lock you out of future funding entirely. Banks, funds, and serious investors do not touch structures that look improvised.
Done properly, compliance is not a blocker. It is a credibility filter.
The Real Trade-Off: Complexity Versus Access
Tokenization is not “easier” than traditional finance. It is different.
You trade some banking friction for legal structuring, smart contract logic, custody considerations, and investor onboarding. For very small raises, that trade-off rarely makes sense. For mid-sized, asset-backed financing where banks say no but assets are real, it can.
This is where SMEs need to be honest. If the business cannot produce clean financials, enforceable contracts, or a coherent capital story, tokenization will not save it.
So, Hype or Accessible?
It’s both.
For many SMEs, tokenization today is oversold. The tooling is ahead of the market, and too many intermediaries sell the dream without the discipline.
But for asset-heavy, revenue-generating SMEs that already understand structured finance, tokenization is becoming a usable tool. Not a shortcut. A tool.
The winners will not be the loudest projects. They will be the ones that treat tokenization as a financing format, not a marketing strategy.
