Institutional adoption of real-world assets (RWAs) is splitting between public and permissioned networks, exposing a divide between the liquidity advantages of blockchains like Ethereum and the privacy demands driving systems such as Canton Network.
The divergence is becoming more pronounced as tokenized assets gain traction among major asset managers.
Marcin Kaźmierczak, co-founder of blockchain oracle provider RedStone, said product development is likely to occur on public blockchains, while permissioned systems are better suited for institutional processes that require confidentiality.
“There are some operations between institutions that simply have to stay private, and this is the value proposition that Canton offers very effectively,” Kaźmierczak told Cointelegraph.
Digital Asset’s Canton Network lets banks and asset managers tokenize and settle RWAs while keeping transaction details visible only to involved parties. The network says it processed $6 trillion in RWA value in 2025.
Rather than converging on a single architecture, banks and asset managers are building parallel systems designed to serve different functions within the tokenized financial stack, according to Kaźmierczak.
Ethereum’s Merge was Wall Street’s tokenization moment
Tokenization has become one of the main narratives behind institutional blockchain adoption beyond spot crypto exposure and exchange-traded funds (ETFs).
In June 2024, McKinsey estimated that tokenized assets could reach around $2 trillion by 2030. More optimistic projections have much higher forecasts, including a $30.1-trillion target by 2034 set by Standard Chartered and Synpulse.
Regulatory clarity in the US has contributed to the shift. The GENIUS Act, passed in 2025, created a federal framework for stablecoins, which serve as the settlement layer for many tokenized assets.
Kaźmierczak said confidence in Ethereum began improving earlier, after the network transitioned to proof-of-stake in 2022.
“In 2022, when I was talking to institutions, the Merge was like a big question mark for those institutions,” Kaźmierczak said. “They saw it worked without any hiccups, so it gave them this confidence.”
Kaźmierczak claimed that RWA projects among institutions started in 2023 or 2024, but as institutions work with yearly budgets, developments and project launches don’t occur in weeks or months like they do in crypto. That led to a cluster of institutions announcing tokenization projects last December, he said.
“It’s not that they started in Q4 last year. No, they started a year before, and now we are seeing the fruits.”
Today, over $26.4 billion worth of RWA tokens use blockchains as distribution layers, and over $15 billion of those are on Ethereum. It also holds the deepest liquidity as the veteran in the smart contracts circle, with over $160 billion in stablecoins.
Related: Why institutions still prefer Ethereum despite faster blockchains
Banks are splitting activity across public and private chains
Institutions separate market-facing activity from internal operations. On one hand, public blockchains provide liquidity, composability and access to decentralized finance (DeFi) strategies such as lending and tokenized vaults. On the other hand, permissioned networks are preferred for settlement processes, bilateral transactions and internal asset management workflows that cannot be exposed on open networks.
Systems such as Canton allow financial firms to automate those processes while keeping transaction details restricted to counterparties. That structure is closer to existing traditional financial (TradFi) infrastructure.
That division suggests institutional blockchain adoption may not converge on a single network model. Instead, financial firms appear to be building parallel infrastructure, with public chains handling liquidity and permissioned systems supporting operational processes behind the scenes, according to Kaźmierczak.
“There are some operations between institutions that just have to stay private, and this is the value proposition that Canton offers very effectively. That’s the reason we want to be on both of those legs,” he said.
Several major financial institutions were involved in the Canton Network from its inception. Digital Asset and a consortium of firms, including Microsoft, Goldman Sachs and Deloitte, announced the network’s launch in May 2023. In September 2024, Digital Asset and the Depository Trust & Clearing Corporation completed a pilot of the US Treasury Collateral Network on Canton.
According to RWA.xyz, the Canton Network has over $313 billion in represented RWA tokens, referring to assets that use the blockchain as a recordkeeping layer.
Related: Privacy tools are rising behind institutional adoption, says ZKsync dev
ZK-proofs vs. permissioned privacy
One of the clearest distinctions between the two institutional tracks lies in how privacy is achieved. While many blockchain projects pursue confidentiality through cryptographic tools such as zero-knowledge (ZK) proofs, Canton relies on permissioned data sharing, where transactions are visible only to the parties involved.
Not everyone in the industry agrees that this is the strongest model. Matter Labs CEO Alex Gluchowski said in a social media exchange with Digital Asset’s Yuval Rooz that ZK systems strengthen blockchain security by requiring cryptographic proofs that every state transition follows the protocol’s rules. Even if operators or administrators are compromised, attackers cannot insert invalid transactions into the ledger without generating a valid proof of execution.
Rooz, in a blog post, claimed that fully opaque implementations of ZK systems could make it harder to audit activity in financial markets. If transaction data becomes entirely hidden, errors or fraud could remain undetected, potentially recreating the kind of “black box” conditions that once enabled corporate scandals such as Enron.
The disagreement highlights a broader architectural question for institutional blockchain adoption, as Kaźmierczak pointed out.
Financial firms are experimenting with multiple approaches to balancing privacy, verifiability and control. Public networks continue to host market-facing liquidity and DeFi activity, while permissioned systems replicate institutional processes that require confidentiality, forming parallel rails for the tokenized financial system.
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