Private Equity Tokenisation: A New Era for Real-World Assets
The private equity market, traditionally seen as exclusive and illiquid, is on the cusp of a technological revolution. This change is driven by private equity tokenisation—the process of converting real-world assets (RWAs) into digital tokens on the blockchain.
According to data from RWA.xyz, the market for tokenised equities currently has a total value of $360.49 million, a 26.61% rise year-to-date (YTD) and a staggering 6,454% increase from 12 months ago as of August 25, 2025. This explosive growth signals a major shift in how investors can access and trade high-value assets.
In this article, I'll explore the specifics of private equity tokenisation, the benefits and risks of this innovation, and how platforms like VALR are pioneering access to tokenized assets.
How Private Equity and Tokenised Equities Are Evolving With the Blockchain
Private equity involves investments in companies that are not publicly traded. Historically, this has been a world of paper agreements, lengthy lock-up periods, and high barriers to entry, making it inaccessible to most. This is where the concept of private equity tokenisation comes into play, changing the landscape by introducing tokenized fund interests and shares.
Tokenised equities are digital tokens that represent ownership or economic exposure to an underlying asset, like a share in a company or an interest in a private fund. Through private equity tokenisation, the entire lifecycle of an investment can be streamlined by representing ownership on a secure and transparent blockchain.
This evolution allows for automated processes through smart contracts, simplified ownership verification, and a more efficient flow of information between fund managers and investors. This helps cut down on the cumbersome paperwork and administrative overhead that has defined the industry for generations.
What Are the Benefits and Risks of Private Equity Tokenisation?
Private equity tokenisation offers a powerful set of benefits for both investors and fund managers.
One of the most significant advantages is the potential for increased liquidity. With private equity tokenisation, converting illiquid, long-term investments into tradable digital tokens makes it possible to create secondary markets where investors can buy and sell their stakes more freely. This is closely linked to greater accessibility through fractional ownership, which breaks down high-value assets into smaller, more affordable units, lowering the historically high minimum investment amounts and opening the door to a wider range of investors.
Furthermore, the blockchain provides enhanced transparency, as every transaction is recorded on an immutable ledger, reducing fraud and building investor confidence. This, combined with the efficiency of smart contracts, which can automate complex processes like dividend distributions and compliance checks, can lead to faster, cheaper transactions and lower operational costs.
However, the path of private equity tokenisation is not without its challenges and comes with notable risks. Regulatory uncertainty remains a primary challenge, as the legal framework for digital assets is still evolving and varies significantly across jurisdictions. The technology itself, while secure, is not immune to risks such as smart contract vulnerabilities that could be exploited by hackers.
For investors, market risk is a key consideration in private equity tokenisation. While it can enhance liquidity, it can also introduce greater price volatility, as retail investors may struggle to manage constant price fluctuations. Finally, for private equity's core participants, the public nature of (most) blockchains could raise confidentiality concerns, as data on ownership, capital calls, and distributions must remain private.
VALR Introduces Tokenised Private Credit to South Africa With USDPC
While the industry moves towards full private equity tokenisation, related innovations like tokenised private credit are emerging. Pioneering this in Africa, VALR has launched the Garrington Capital USD Private Credit Token (USDPC). This move brings a new class of tokenised real-world assets to the continent, offering institutional-grade investment opportunities to a broader audience.
USDPC is a yield-bearing crypto asset that represents a tokenised interest in Garrington Capital's Private Credit Strategy. This strategy focuses on a diversified portfolio of senior secured, asset-backed private loans across North America, targeting annual returns of 8-10%. The token, issued by VALR's partner RainFin, allows stablecoin holders and other investors to access consistent, risk-adjusted returns with low correlation to traditional crypto markets. Backed by Garrington Capital's 25-year track record and over $6 billion deployed, the strategy has delivered a net annualised 3-year return of 10.70% as of June 2025.
VALR users can access USDPC through VALR's over-the-counter (OTC) desk, with a more streamlined experience planned for the upcoming VALR Invest platform.
From Public Equities to Future Private Equity Tokenisation
Further expanding its offering of tokenised assets, VALR launched xStocks on July 31, 2025, becoming the first crypto exchange in Africa to introduce tokenised U.S.-listed equities trading. This innovative product offering underscores VALR's mission to bridge the gap between traditional and digital finance.
xStocks are 1:1-backed tokenised representations of leading U.S.-listed equities, including popular companies like Tesla, NVIDIA, Robinhood, Circle, and Coinbase. Issued by Backed Finance, these tokens provide holders with price exposure to the underlying stock, though they do not confer ownership or voting rights. This structure allows users to diversify their portfolios and gain exposure to global markets with unprecedented ease.
For VALR users, this means you can now trade tokens representing some of the world's most prominent companies directly on the VALR platform. xStocks can be traded on the Spot market against USDT or swapped for other crypto assets via the Simple Buy & Sell terminal. Transactions are efficient and seamless, with deposits and withdrawals supported via the Solana network.
Trade Tokenised Real-World Assets With VALR
Private equity tokenisation is reshaping the investment space, breaking down long-standing barriers and creating a more liquid, transparent, and accessible market for private investments. By bringing RWAs like private credit and U.S.-listed equities on-chain, this innovation offers powerful new tools for portfolio diversification.
VALR is at the forefront of this movement in Africa, providing a secure and regulated platform to access these next-generation financial products. Through offerings like USDPC and xStocks, platforms are paving the way for users to eventually gain exposure to tokenised private equity, an asset class that was once entirely out of reach for most investors.
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Frequently Asked Questions
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Private equity tokenisation is the process of converting ownership in private companies or funds into digital tokens on a blockchain. This makes traditionally illiquid assets more accessible, tradable, and transparent, allowing for fractional ownership and potentially greater liquidity.
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Tokenised stocks are digital tokens on a blockchain that represent exposure to the price of an underlying share, such as a U.S. listed company. These tokens can be traded on crypto exchanges, providing investors with the ability to buy, sell, and swap exposure to global equities, although they usually do not confer legal ownership or voting rights.
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An example is the Garrington Capital USD Private Credit Token (USDPC), available on VALR. USDPC represents a share in a portfolio of senior secured, asset-backed private loans, giving investors access to yield-bearing private credit through a blockchain-based token.
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The launch of xStocks by VALR is a notable example, where tokens represent leading U.S. listed equities such as Tesla, NVIDIA, and Coinbase. These tokenised assets allow investors to gain price exposure to private equity and global shares through a simple and regulated platform.
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate.
VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.