Starwood’s Barry Sternlicht: Ready to Tokenize $125B in Real Estate, But U.S. Regulation Blocks It
Barry Sternlicht, founder of Starwood Capital Group which manages more than $125 billion in assets, said the firm is prepared to begin tokenizing real-world assets such as real estate but is prevented from doing so by U.S. regulatory barriers. Speaking at the World Liberty Forum in Palm Beach, Sternlicht called tokenization “the future,” arguing blockchain-based tokens could open new capital-raising options and provide investor access to illiquid markets. He compared the current stage of tokenization to an earlier phase than artificial intelligence and urged regulatory catch-up. The article cites industry activity and projections — including Deloitte’s estimate that tokenized real estate could grow from $0.3 trillion in 2024 to $4 trillion by 2035 — and mentions firms like Propy already pursuing property-related blockchain initiatives. Key implications: tokenization promises operational efficiency, lower administrative costs, and greater retail participation, but U.S. regulatory uncertainty is a major adoption barrier.
Neutral
The news is neutral for crypto markets overall. Positive fundamentals: a high-profile institutional manager (Starwood Capital, $125B AUM) publicly endorsing tokenization highlights long-term demand for blockchain-based real-world-asset (RWA) products and supports growth narratives for token infrastructure, custody, and tokenization platforms. Deloitte’s $4T by 2035 projection cited adds credibility to the long-term market opportunity. Negative/limiting factor: Sternlicht stresses that U.S. regulatory barriers are currently blocking implementation; regulatory uncertainty typically suppresses near-term product launches, liquidity, and institutional flows. For traders: short-term market reaction is likely muted — the announcement signals intent rather than immediate issuance or new tradable tokens, so it should not move spot crypto prices materially. In the medium-to-long term, continued advocacy from major asset managers could be bullish for tokenization-focused tokens and layer-1s/infra that support RWAs if regulation becomes clearer and products roll out. Comparable precedents: past regulatory headwinds (e.g., US custody/ETF approvals) delayed institutional adoption cycles but did not negate long-term upside once frameworks emerged. Monitoring: regulatory developments, pilot token offerings, partnerships between asset managers and token infrastructure firms, and on-chain issuance activity will be the primary catalysts that could shift this neutral view to bullish.