Sternlicht Says U.S. Regulation Blocking RWA Tokenization Push

• Sternlicht has questioned the U.S. regulatory system in supporting RWA tokenization. 
• Tokenized real estate could grow from $300B in 2024 to $4T by 2035, per Deloitte.
• US securities law limits open and retail participation, but rules may change under President Trump.

Barry Sternlicht has questioned the regulatory framework in Washington amid mainstream demand for real-world assets (RWA) tokenization. The real estate billionaire and CEO of Starwood Capital Group, which manages more than $125 billion in assets, said his firm is ready to move into the RWA sector, but United States regulatory barriers are stopping him from acting.

“We want to do it right now and we’re ready. It’s ridiculous that our clients can’t do it in token,” Sternlicht stated on Wednesday at the World Liberty Forum in Palm Beach.

Crypto Tokenization Surges Amid Regulatory Hurdles 

The RWA space has experienced a major boom catalyzed by global demand and regulatory goodwill in the United States. According to a report from the Deloitte Center for Financial Services, the tokenized real estate could expand from roughly $300 billion in 2024 to nearly $4 trillion by 2035, as financial institutions increasingly integrate blockchain into traditional asset markets. The report notes that efficiency gains, fractional ownership, and improved liquidity are key drivers behind this projected expansion.

Against this backdrop, Sternlicht argued that the traditional financial system must move faster to accommodate tokenization. He expects legislators in the United States to lead other global jurisdictions in enacting supportive regulatory frameworks.

“The technology is superior. This is the future. This is even earlier in the physical world than AI is. It’s a fantastic thing for the world, the world just has to catch up with it,” Sternlicht stated.

What Regulatory Change is Needed?

In the U.S., tokenized real estate is treated as a traditional security, subject to full federal securities law. As such, the United States restricts participation to accredited investors. Secondary markets remain permissioned, with strict Know Your Customers (KYC), whitelisting, custody requirements, and ownership is often represented as economic claims, not direct deeds.

Under President Donald Trump, the crypto industry is well-positioned to get legal clarity, especially under the CLARITY Act. The United States Senate has been debating the CLARITY Act, but it has stalled due to the stablecoin rewards issues between traditional banks and web3 firms.

Related: A 20x Surge in RWAs and a $3 Billion ETF Influx Solidify Ethereum’s Market Dominance