Tokenisation is moving beyond experimentation. In Malaysia, that shift became tangible this year with its first tokenised sukuk priced at a nominal value of RM100 million. The pilot brought together banks and institutional investors to test how distributed ledger technology could operate within an established capital-market framework.Real-world assets, or RWAs, are digital representations of existing financial or physical assets such as government securities, commodities, equities, funds and credit. Using blockchain technology, tokenisation creates a digital record of an instrument that already exists. The underlying asset, such as real estate or solar farms, and the legal and commercial arrangements around it, continue to exist off-chain.Blockchain is being tested here as infrastructure for assets and markets that investors already understand. That is a narrower claim than the one usually made for it, and a more durable one. The useful question is no longer whether RWAs can be tokenised, but where tokenisation is gaining traction and what still needs to be in place for adoption to scale.Looking Beyond the Headline GrowthAccording to CoinGecko’s 2026 RWA Report, the market capitalisation of tokenised RWAs increased from US$5.42 billion at the start of 2025 to US$19.32 billion as at 31 March 2026, an increase of 256%. Stablecoins, which CoinGecko tracks separately, stood at US$301.65 billion.Growth has been concentrated. The breakdown below shows where it sits.

RWA categoryMarket value, 31 Mar 2026Leading project or assetPrimary driverFiat stablecoinsUS$301.65bnUSDT, USDCOn-chain liquidityTokenised TreasuriesUS$12.99bnCircle USYC, BlackRock BUIDLInstitutional yieldCommodity tokensUS$5.55bnTether Gold XAUT, PAX Gold PAXGGold price rallyPrivate creditUS$2.29bnMaple Finance (US$2.13bn active loans)Institutional crypto lendingTokenised stocksUS$0.49bnCircle, Tesla, Nvidia, SpaceXRegulatory clarityTokenised ETFsUS$0.30bnOndo SPDR S&P 500, iShares Silver Trust (Ondo)On-chain TradFi access

Source: CoinGecko Research, 2026 RWA Report, data as at 31 March 2026. Private credit data sourced by CoinGecko from DefiLlama. Stablecoins and private credit are tracked separately from the US$19.32 billion tokenised RWA total and are not additive to it.Treasuries and commodities together made up a significant proportion of growth in market value in tokenised RWAs, with gold-backed products driving most of the commodities figure.That concentration is instructive of growing institutional acceptance. Government debt and gold reached scale first, and both have established pricing, familiar financial characteristics and deep existing markets. That is a more mundane explanation than novelty, and a more useful one.The institutions moving first reflect the same pattern. BlackRock, Franklin Templeton and JP Morgan have each brought money market and Treasury products on-chain, applying the technology to instruments they already issue and manage. Tokenisation is gaining traction where the underlying economics are already clear, which points to a distinction that matters: its near-term value lies less in creating new asset classes than in improving how established ones are issued, distributed, transferred or settled. What the Technology Changes, and What It Does NotTokenisation is often associated with greater access, transparency, efficiency and liquidity. Each is possible. None is automatic.Fractionalisation divides an asset into smaller investment units, lowering minimum ticket sizes and broadening participation. But actual investor access still depends on securities laws, investor eligibility, distribution channels and the jurisdiction in which the product is offered. Blockchain creates an auditable record of on-chain transactions, but it cannot prove on its own that an underlying asset exists, is valued correctly or is free from competing claims. Those assurances depend on legal structure, custody, independent verification and governance.Liquidity provides the clearest example. A token makes an asset technically easier to transfer, but finding a buyer is a separate problem. CoinGecko found that although tokenised equities have grown rapidly, monthly trading volumes remain a small fraction of real-world stock market volumes. A more tradable wrapper does not automatically make an illiquid market liquid.The technology can change the rails. The economics of the underlying market still matter.  From Experimentation to Institutional InfrastructureNone of this diminishes the potential of RWAs, but it does set out what institutional adoption requires. To move beyond individual pilots, tokenised assets need technology that interacts with regulated custody, enforceable ownership rights, credible valuation and disclosure, cybersecurity, investor protection and existing financial infrastructure.Different token structures also confer different rights. CoinGecko’s review of major tokenised equity issuers found three approaches in use. Some products are structured notes backed by securities held through regulated intermediaries. Others use segregated custody arrangements. In a few cases, the token itself is the legally registered share. The difference determines what an investor owns, who stands behind that claim and which legal and regulatory protections apply. Malaysia is Beginning to Test the BridgeMalaysia is an interesting setting for this transition because experimentation is taking place at different layers. At one end are early-stage builders working on applications such as energy infrastructure and data verification. At the institutional end sits the tokenised sukuk pilot undertaken by Khazanah Nasional in collaboration with the Securities Commission (SC).The pilot is relevant because it works inside the existing financial system rather than around it. The joint media release describes it as a test of institutional readiness, executed under the SC’s pilot programme so that emerging technologies remain consistent with market integrity and investor protection. It gives the market a template that lowers technical and regulatory barriers for future issuers and is aligned with the direction set under the Capital Market Masterplan 2026-2030.Malaysia’s wider policy environment is also evolving. The upcoming National Blockchain Policy, led by the Ministry of Digital, will provide clearer national direction for blockchain and Web3, covering governance, infrastructure, talent, funding and research and development.Taken together, these point to a more useful national question than whether Malaysia should participate in blockchain. It is whether Malaysia can build the technical, regulatory, commercial and investment capabilities around it strongly enough to capture meaningful value. What This Means for Venture CapitalFor venture capital, the opportunity around RWA extends beyond the tokenised assets themselves. As financial infrastructure becomes programmable, companies are emerging around the layers that make it work, from verification and custody through to compliance, settlement and interoperability.These businesses illustrate why frontier categories demand a wider set of investment capabilities. Software evaluation is only part of it. A tokenised credit business requires an understanding of the credit being originated. A custody business must be assessed through both technology and regulatory lenses.There is also a question of where economic value ultimately accrues. Over the fifteen months covered by its report, CoinGecko found that six of the seven leading RWA project tokens it tracks, excluding stablecoin issuer tokens, recorded significant negative price returns even as the sector expanded. It notes that on-chain value creation does not necessarily translate into value accruing to token holders. Market growth and investment returns are not the same thing.Jelawang Capital commits capital to venture capital fund managers who assess opportunities and make their own investment decisions. Manager capability is therefore the variable that matters. Categories at the intersection of technology and regulated markets require expertise across technology, legal structure, regulation, counterparties and the economics of the underlying asset. The question is less about exposure to RWAs as a theme than about whether managers can assess where durable value is built.Adoption is progressing fastest where the underlying asset is already trusted and understood. The harder work is building the infrastructure, governance and institutional confidence that lets tokenisation travel further.Advancing Malaysia depends on more than being present where the next generation of financial infrastructure is built. It depends on Malaysian firms, managers and institutions capturing more of the value created along the way. Jelawang Capital supports the development of fund managers with the capability to evaluate and back frontier categories as they mature in Malaysia’s venture ecosystem.

For decades, Malaysia’s economic success story was built on its ability to attract investment, create jobs and become a trusted manufacturing hub for the world. Factories were built, exports surged and the country emerged as one of Asia’s rising economies. Yet today, Malaysia faces a new challenge: how to capture more of the value it helps create. Embarking on this journey requires considerable time and resources, but it is crucial if the country is to advance from merely hosting value to actually owning it. To understand this challenge, it helps to examine two powerful concepts discussed by Khazanah Nasional’s Chief Investment Officer and Jelawang Capital Chairman, Datuk Hisham Hamdan: the “hotel economy” and the “smile curve” in the 2025 Khazanah Report. Together, these concepts explain why Malaysia must move beyond simply hosting economic activity and instead build greater ownership, innovation and technological capability. They also illustrate why initiatives to elevate the venture capital ecosystem undertaken by Jelawang Capital are important to strengthening Malaysia’s long-term economic future. Understanding the Hotel EconomyImagine a luxury hotel bustling with activity. Business leaders gather in meeting rooms, investors negotiate major deals in the lounge and entrepreneurs strike partnerships over coffee. The hotel serves as the venue, while providing services that make these interactions possible.However, while billion-ringgit agreements may be concluded inside the hotel, the hotel itself captures only a small fraction of the value generated. Most of the profits, ownership and strategic benefits belong to the parties doing business there. This is the essence of the “hotel economy.”For many years, Malaysia has successfully acted as a host for global manufacturing and multinational investment, as evidenced by our success as a regional backend hub for semiconductor packaging. Foreign companies have set up factories, employed Malaysian workers and exported products worldwide. While this creates jobs and economic activity, the highest-value elements such as intellectual property, product design, research and strategic decision-making often remain in the hands of overseas headquarters. Malaysia benefited from economic activity but ultimately captured only part of the total value created. This raises two questions: how much of this value does Malaysia truly keep, and how can we capture more?The challenge is not to stop attracting foreign investment, but to ensure that more ownership, expertise and long-term value remain within the country. The Smile Curve, ExplainedA second concept to understand where Malaysia is positioned as an economy is through the “smile curve.”Imagine a curved smile or a ‘U’ pattern. At both ends of the smile are activities that generate high value and high profits. On one side are research, innovation, intellectual property creation and technological advances. On the other side are assembly, distribution and after-sales services. At the bottom of the curve sits manufacturing and assembly work. While these activities are essential, they often generate thinner margins because they can be replicated more easily and compete mainly on cost. Malaysia’s position among the Smile Curve (2000 vs. 2019) from Marcopolo.org analysisMalaysia’s industrial growth has historically been concentrated near the bottom of this curve and saw marginal gains over the past two decades. On the other hand, the country developed the necessary expertise and became highly competitive in manufacturing, supported by strong infrastructure, industrial parks and skilled workers. This model fuelled decades of growth and helped transform Malaysia into a major export economy. But the global landscape has shifted. Lower-cost countries such as Vietnam and Thailand now compete aggressively for manufacturing investment, making it harder for Malaysia to rely solely on assembly and production. The country needs to move up the value chain to avoid becoming stuck in the middle. In other words, it needs to move up to higher-value ends of the smile curve.According to the article, Malaysia is caught between being too costly to compete purely on labour and not yet positioned strongly enough at the high-value ends of the curve. Why Ownership MattersThe difference between hosting value and owning value is crucial.A country may manufacture a sophisticated product, yet the largest profits often flow to whoever owns the patents, controls the technology or manages the global brand. A semiconductor component can be assembled in one country, but the economic benefits may largely accrue elsewhere if the design, software and intellectual property are owned overseas.That is why economic development today is increasingly about creation and ownership of ideas. Technology and innovation take precedence over merely participating in production.Datuk Hisham uses another analogy from economist Ricardo Hausmann: economic development is like a game of Scrabble. Infrastructure, roads and factories are the “vowels” that every economy needs. However, it is the rarer “consonants” such as deep technical knowhow, advanced research capabilities, entrepreneurial talent and intellectual property that enable countries to form more valuable combinations and compete at the highest levels. Malaysia already possesses many of the foundational vowels. The next stage is acquiring more of these high-value consonants. Why Startups and Venture Capital MatterThis is where venture capital becomes critical.Many of the world’s most valuable companies began as startups pursuing new technologies, business models and products. Venture capital provides the risk-tolerant funding that allows these young companies to experiment, innovate and scale before profitability is achieved.But this kind of funding is, by design, difficult to provide well. Backing a company before its technology, its market, or its team has been proven is a different kind of work than financing something already established. Banks need predictable repayment. Public markets need quarterly results. Very few institutions are structured to wait years for an outcome that isn't guaranteed.Of every ten companies a fund manager backs, most will not return the capital invested in them. The few that do carry the rest. That is not a flaw in how venture capital works. It is how venture capital works, and it is precisely why doing it well requires real discipline, not less of it. A strong venture capital ecosystem does more than create successful businesses. It develops founders, attracts talent, generates intellectual property, creates high-value jobs and builds entire innovation ecosystems. In practical terms, it helps countries move toward the high-value ends of the smile curve. Cultivating promising startups requires a long-term commitment. Building homegrown champions capable of competing globally is a direct result of truly catalytic capital. What This Means for MalaysiaJelawang Capital's current mandate extends this same approach across sectors and geographies, ensuring that high calibre startups receive the support they deserve. SkyeChip Bhd received early stage venture capital backing by Ilham Capital and LionX Ventures, two fund managers supported by Jelawang Capital. Aonic, a Malaysian dronetech startup backed by Kairous Capital, now operates across 15 countries, holds major contracts with Malaysian plantation groups, and is profitable.Granite Asia-backed Galatek Technologies, a semiconductor equipment and vision-AI company, is now expanding its manufacturing footprint in Penang with a sizeable investment commitment of $100 million.Neither SkyeChip nor Aonic looked inevitable in the beginning. That is what foundational investing actually requires: backing a specific team, at a specific stage, well before the market, or the outcome, is settled.Jelawang Capital’s RoleAs Malaysia’s National Fund-of-Funds and part of Khazanah’s Dana Impak, Jelawang Capital seeks to strengthen Malaysia’s venture capital ecosystem through initiatives such as the Emerging Fund Managers’ Programme (EMP) and the Regional Fund Managers’ Initiative (RMI). To date, approximately RM300 million has been mobilised, alongside RM30 million crowded in from external co-investors for fund managers under the EMP.Jelawang Capital does not invest in startups directly. It backs credible, disciplined fund managers who make these calls, long before the outcome is clear, so that companies like these can get the early support that lets them build. Venture capital isn’t just about patient capital, but also disciplined fund selection, strong governance, rigorous due diligence and active portfolio oversight.Malaysia's next chapter of development will not be written simply by attracting more economic activity. Success will depend on whether the country can own more of the value generated from that activity.The hotel economy reminds us that hosting value is not the same as capturing it. The smile curve shows that the greatest rewards increasingly belong to those who innovate, design, build brands and own intellectual property. It is slow, often invisible work. Some companies may not succeed, but others will go on to change how an entire industry operates, and in doing so, help Malaysia own a little more of what it builds, rather than simply hosting it.As Datuk Hisham put it in his essay: "Not every effort will reach maturity. But that is not failure. It is the price of building something authentic."