Who Will Win the Tokenization Race: Startups, Banks, or Governments?
Saher Kh-February 2026
Every major financial revolution follows a familiar pattern.
First, startups innovate.
Then, institutions react.
Finally, governments establish the rules.
Real estate tokenization is now moving through this exact cycle.
What began as a niche experiment by Web3 startups is rapidly attracting attention from global banks, sovereign regulators, and major real estate authorities.
The big question is no longer whether tokenization will scale.
The real question is: Who will control the future of tokenized real estate?
Phase One: The Startup Pioneers
Startups were the first to recognize the opportunity.
They moved fast, built early platforms, and proved that fractional ownership on blockchain could work.
What startups did best:
Rapid innovation
User-friendly platforms
Global accessibility
Early market education
Experimental business models
Companies like RealT, early STO platforms, and various PropTech ventures showed the world that real estate could be digitized.
But speed comes with limitations.
Startup challenges:
Regulatory uncertainty
Limited institutional trust
Liquidity constraints
Capital limitations
Long-term scalability questions
Startups lit the spark — but they may not control the entire fire.
Phase Two: The Banks Enter the Arena
Banks rarely move first.
But when they move, they move with scale.
Across Europe, Asia, and the Middle East, major financial institutions are now exploring tokenized securities, digital custody, and blockchain settlement layers.
Why banks are interested:
New revenue streams
Lower settlement costs
Competitive pressure from fintech
Demand from institutional clients
Efficiency gains in capital markets
Banks bring something startups often lack:
Trust, capital, and infrastructure.
However, banks also move cautiously.
Bank limitations:
Slower innovation cycles
Heavy compliance layers
Legacy technology constraints
Risk-averse culture
Banks can scale tokenization — but they rarely lead disruption.
Phase Three: Governments and Regulators Step In
This is where the real game changes.
When governments build regulatory frameworks for tokenized assets, markets gain:
Legal clarity
Investor protection
Institutional confidence
Cross-border legitimacy
The UAE, Switzerland, Singapore, and parts of Europe are already moving aggressively.
Dubai’s coordinated approach — through the DLD, VARA, DIFC, and ADGM — is particularly notable.
Governments don’t build platforms.
But they decide which platforms survive.
So… Who Actually Wins?
The most likely outcome is not a single winner.
It’s an ecosystem.
Startups will drive innovation.
They will build user experiences, experiment with models, and push boundaries.
Banks will provide scale.
They will bring custody, large capital flows, and institutional rails.
Governments will provide legitimacy.
They will set the rules that allow global adoption to happen safely.
Tokenization will succeed where these three forces intersect.
The Emerging Power Structure
Looking ahead, the tokenized real estate market may evolve into three layers:
Layer 1 – Infrastructure & Regulation
Governments, land departments, and regulatory bodies.
Layer 2 – Financial Rails & Custody
Banks, licensed exchanges, institutional platforms.
Layer 3 – User Experience & Distribution
Startups, PropTech platforms, and digital marketplaces.
The winners won’t be those who try to dominate everything.
They will be those who collaborate across layers.
Why the UAE Has a Strategic Advantage
The UAE is uniquely positioned because it is aligning all three forces simultaneously:
Pro-innovation regulators
Strong banking sector
Active PropTech ecosystem
High global investor interest
Government-led digital strategies
Few jurisdictions are moving this cohesively.
If execution continues at this pace, the UAE could become one of the first fully integrated tokenized real estate ecosystems in the world.
What Investors Should Watch
Over the next 24–36 months, the key signals will be:
Licensing of regulated tokenized exchanges
Bank custody integrations
Government-backed real estate pilots
Institutional fund participation
Secondary market liquidity growth
These milestones will determine how fast tokenization enters the mainstream.
Closing Thoughts
Financial revolutions are never won by a single player.
They are built through phases of disruption, validation, and institutionalization.
Tokenized real estate is now entering its most important phase.
The technology is ready.
The regulators are moving.
The institutions are watching closely.
The race has begun.