GSR CEO Highlights Demand Challenges in Tokenization of Private Credit

In a recent podcast, GSR CEO Xin Song discussed the challenges facing the tokenization of private credit and other illiquid assets, asserting that the technology for tokenization is sound, but demand has not kept pace with supply.

Song pointed out that while the tokenization of the $300 trillion securities market is technically feasible, the real issue lies in finding buyers for these assets. He highlighted that many tokenized real-world assets, valued between $39 billion and $60 billion, experience minimal trading activity, with some recording zero trades in a week.

To address this demand gap, GSR is investing over $100 million in initiatives aimed at enhancing onchain finance and tokenization, including the launch of Hare, an onchain vault business focused on yield products based on stablecoins and tokenized gold.

Despite the overall stagnation in certain sectors, tokenized equities have shown promise, reaching a market value of approximately $4.87 billion to $5.89 billion as of September 2026. However, the market for tokenized private credit remains uncertain, with estimates for its value in 2026 ranging from $4 billion to $18.9 billion.

Song’s insights serve as a reminder of the complexities involved in tokenization, particularly for illiquid assets that were difficult to trade even before entering the blockchain space. Investors should be cautious about assuming that tokenization automatically leads to liquidity.