UPSC Prelims 2026 Question:

Which of the following statements about Real-World Assets (RWA) Tokenization are correct?

1. Tokenization is the process of turning real world assets into digital tokens using blockchain technology.

2. Tokenization of real world assets offers 24x7 access, promoting financial inclusion.

3. Tokenization of real world assets will allow the access to high growth investment opportunities for  individuals in India. 

Select the answer using the code given below:

Answer: 1 

Explanation:  

Real-World Asset (RWA) Tokenization refers to the process of converting ownership rights of real-world  assets into digital tokens using blockchain or distributed ledger technology. 

• According to experts from National Payments Corporation of India and financial industry reports,  tokenization enables both full and fractional ownership of assets such as real estate, commodities, bonds,  invoices, and other financial instruments. 
• Tokenization converts ownership of real-world assets into blockchain-based digital tokens. So,  statement 1 is correct. 
• Tokenized assets can be traded digitally on blockchain platforms with near real-time settlement and 24×7  accessibility, thereby promoting broader financial inclusion and easier participation. So, statement 2 is  correct. 
• Tokenization enables fractional ownership, reducing investment barriers and allowing retail investors  in India to access high-value and high-growth investment opportunities such as commercial real  estate, fine art, infrastructure assets, and tokenized securities. So, statement 3 is correct.

Therefore, option (1) is the correct answer.