Mubadala Capital has entered a strategic partnership with KAIO to explore on-chain Real-World Assets (RWAs), aiming to apply tokenization to private-market investment strategies. The collaboration positions on-chain RWAs within Abu Dhabi’s regulated environment and signals institutional interest in compliant digital lifecycles for traditionally illiquid assets, backed by Mubadala Capital’s more than $30,000,000,000 in managed capital and over $430,000,000,000 administered including client assets.
Institutional RWA tokenization under a compliance-first architecture
KAIO is presented as an institutional-grade RWA infrastructure provider created by WebN Group and Nomura’s Laser Digital, offering lifecycle management for tokenized funds. Real-world asset (RWA) in this context denotes a digital representation of an off-chain asset—such as private equity interests or fund shares—recorded on a distributed ledger to enable fractional ownership and transferability.
Mubadala’s stated objective is to use KAIO’s framework to explore tokenized access to its private-market strategies, without announcing a public timeline or specific asset classes for initial issuance. This measured approach underlines that the partnership is in an exploratory phase focused on design, feasibility and institutional readiness rather than immediate product launch.
The partnership is framed to operate within established institutional compliance paradigms, with references indicating likely alignment with Abu Dhabi Global Market (ADGM) approaches and a “full-chain compliance” mindset comparable to Hong Kong’s standards. For compliance teams, the core obligations will include AML requirements, beneficial-owner identification, robust record retention and auditability across the on-chain and off-chain custody boundary.
Traceability and governance requirements will shape token design, transfer rules and custody segregation, and will determine whether offerings qualify as securities within relevant regimes. VASP operators and custodians will need to reconcile travel-rule workflows and process audit trails between traditional custodial systems and on-chain settlement records to preserve regulatory compliance and operational integrity.
Market data for the RWA sector shows a jump from about $5,000,000,000 in 2022 to an estimated $24,000,000,000 by mid-2025, with consultancy projections extending to $16,000,000,000,000 by 2030 and $30,000,000,000,000 by 2034. Major institutional initiatives—such as BlackRock’s BUIDL and Franklin Templeton’s BENJI—are cited as deploying RWA products across multiple networks including Aptos, Solana and BNB Chain, underscoring that tokenized exposure is moving firmly into mainstream asset-management workflows.
KAIO’s prior activity includes integration with the Hedera network and reportedly bringing roughly $3,000,000,000 in institutional assets on-chain, which included the BlackRock USD Liquidity Fund. Market practitioners are cautioned about the persistent operational risk known as the “liquidity illusion,” where token availability does not automatically translate into deep, reliable secondary markets without clear regulatory pathways, credible market-making and investor depth.
Mubadala Capital’s collaboration with KAIO represents a measured institutional approach to tokenizing private assets, prioritizing lifecycle compliance, custody clarity and regulatory alignment. The absence of a disclosed pilot timetable underscores a cautious, compliance-first posture, and market participants are advised to monitor for a formal pilot disclosure or ADGM regulatory filings specifying asset classes, custody arrangements and transfer rules as the next verified milestone for assessing operational and compliance impact on VASPs, custodians and token issuers.
