Why are RWAs Needed?
Real-world assets are essential for several reasons:
Diversification: RWAs provide important diversification benefits to investment portfolios. By including assets like real estate, commodities, and infrastructure, investors can reduce overall volatility and risk compared to portfolios.
Inflation Hedge: Many RWAs, such as gold and real estate, are considered effective hedges against inflation. Their values tend to increase or remain stable when the purchasing power of fiat money declines, preserving the real value of an investor’s capital.
Stable Returns: Certain RWAs, like rental properties or infrastructure projects, can generate stable and predictable cash flows, making them attractive during periods of market uncertainty or low interest rates.
Accessibility and Inclusion: Tokenisation of RWAs can enhance accessibility, allowing smaller investors to participate in markets previously dominated by larger institutional players. Accessibility and inclusion, among other factors, act as vectors for market democratisation and broaden access to wealth-building opportunities.
By integrating RWAs into broader financial and investment strategies, individuals and institutions can achieve more balanced, resilient, and comprehensive portfolios.
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