Mubadala Capital has entered a strategic partnership with KAIO to explore on-chain RWAs (real-world assets) for qualified institutional and accredited investors. The initiative combines Mubadala Capital’s $30 billion private markets platform and global footprint with KAIO’s compliant tokenization infrastructure, targeting regulatory-grade custody and identity controls for both issuance and secondary-market activity.
Institutional tokenization of private markets with compliance at the core
The collaboration aims to build tokenized feeder structures and on-chain fund units to broaden distribution through fractional ownership. The effort will target private equity, real estate and private credit exposures, with the goal of enabling programmable access and secondary-market pathways while maintaining compliance.
Mubadala Capital manages roughly $30 billion in private market strategies and forms part of a sovereign group with about $330 billion in assets. The unit operates from five offices with a team exceeding 200 professionals, positioning the platform to scale tokenized distribution in line with institutional requirements.
KAIO brings prior deployments powering institutional tokenization efforts and has on-boarded over $200 million of institutional assets via networks such as Hedera. The platform also includes integrations with on-chain liquidity protocols to support compliant issuance and potential secondary activity.
“Mubadala Capital is leaning into the future of how real world assets can be tokenized and made globally accessible without compromising compliance, governance or investor protections,” said Shrey Rastogi, Chief Executive Officer of KAIO.
KAIO will design the compliant digital infrastructure to preserve enforceability across jurisdictions. The architecture includes legal wrappers for token ownership, integrated KYC/AML flows, oracle-based asset verification and on-chain governance calibrated for institutional oversight.
The venture is assessing institutional custodial arrangements, including exploration of a VARA-licensed custodian in Dubai for tokenized fund units. Custody selection is intended to align issuance and secondary processes with regulatory expectations and cross-border distribution controls.
Technical priorities include smart contract security, interoperable ledger support, reliable price discovery via data oracles and segregated custody models. These elements are intended to align with institutional settlement workflows and audit requirements while supporting scalable, compliant market operations.
Key risks named include regulatory uncertainty, legal enforceability, limited initial secondary-market depth, cybersecurity vulnerabilities and legacy system integration burdens. Strategically, the partnership signals an institutional endorsement of RWA tokenization, where fractionalization could expand investor access, create secondary trading opportunities and enable composability with DeFi protocols for use cases such as borrowing against tokenized fund interests.
Next verified milestone: Await confirmation of the selected blockchain protocol and the formal appointment of a regulated custodian (VARA-licensed or equivalent) before the first issuance to qualified investors. In practice, successful execution could set a template for compliant RWA tokenization at scale by prioritizing custody, identity controls and legal clarity as foundations for institutional engagement.
The Mubadala–KAIO partnership represents a deliberate institutional push to convert private market inventory into programmable, compliant tokenized instruments. By balancing innovation with regulatory and operational discipline, the initiative frames how institutional capital may engage with tokenized private assets under a governance-first approach.
