Official Question UPSC 2026
Which of the following statements about Real-World Assets (RWA) Tokenization are correct? 1. Tokenization is the process of turning real world assets into digital tokens using blockchain technology. 2. Tokenization of real world assets offers 24x7 access, promoting financial inclusion. 3. Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India. Select the answer using the code given below:
Solution & Analysis
Answer: A
Let us analyze the economic mechanics of Real-World Asset (RWA) Tokenization as regulated by bodies like the IFSCA:
•Statement 1 is Correct: This is the definitional premise. RWA tokenization is the cryptographic process of representing ownership rights of tangible physical assets (like real estate or gold) or traditional financial assets (like bonds) as digital tokens on a distributed blockchain ledger.
•Statement 2 is Correct: Traditional stock exchanges and real estate registries suffer from weekend closures, geographic silos, and slow settlement times. Blockchain ledgers operate continuously (24x7 access). Furthermore, by enabling "fractional ownership" (dividing a large asset into micro-tokens), it drastically lowers the barrier to entry, heavily promoting financial inclusion.
•Statement 3 is Correct: By applying fractional ownership to traditionally illiquid and capital-heavy sectors (such as commercial real estate or green infrastructure), tokenization legally democratizes wealth generation, providing everyday retail investors in India access to high-growth opportunities previously reserved only for institutional elites.
Conclusion: All three statements correctly identify the mechanics and benefits of tokenization.