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Q56 (IAS/2026) Science & Technology › ICT, AI, Cybersecurity & Emerging Tech Official Key

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 24 × 7 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:

Result
Your answer: —  ·  Correct: A

Explanation

Statement 1 is correct: Real-World Asset (RWA) tokenization is the process of converting physical or traditional assets (like real estate, art, commodities, or bonds) into digital tokens on a blockchain. Each token represents a proportional ownership stake in the underlying asset.

Statement 2 is correct: Blockchain networks operate continuously, offering 24 × 7 access to trading and liquidity. By enabling fractional ownership, tokenization lowers the barrier to entry, thereby promoting financial inclusion for retail investors.

Statement 3 is correct: Tokenization democratizes access to high-growth and traditionally illiquid investment opportunities (such as premium commercial real estate or private equity) for individuals in India and globally, allowing them to diversify their portfolios with smaller capital outlays.

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PROVENANCE & STUDY PATTERN

Guest preview
Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Which of the following statements about Real-World Assets (RWA) Tokenization are correct? 1. Tokenization is the process of turning real wor…
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 3.3/10 · 3.3/10
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This question blends cutting-edge FinTech current affairs (IFSCA consultation on RWA tokenization) with core static concepts of securitization and fractional ownership. It is a classic UPSC move to test if you can apply basic economic logic (financial inclusion, liquidity) to a new technological buzzword.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Definition of Real-World Assets (RWA) Tokenization in blockchain technology
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable
Web / Current Affairs
ifsca.gov.in Primary · Govt
Presence: 5/5
"Digital tokens issued against a real-world asset commonly entitle the token holder to proportional ownership of the underlying real-world asset, or beneficial interest in the revenues generated by an underlying asset."
Why this source?
  • The International Financial Services Centres Authority (IFSCA) released a comprehensive consultation paper specifically on the 'Regulatory Approach towards Tokenization of Real-World Assets'.
  • It defines tokenization as the process where digital tokens issued against a real-world asset entitle the holder to proportional ownership or beneficial interest.
  • The document outlines the legal and regulatory hurdles for RWAs in the Indian context (GIFT City).
documents1.worldbank.org Standard ref
Presence: 5/5
Why this source?
  • The United Nations Capital Development Fund (UNCDF) provides a formal definition of tokenization as the creation of digital representations of physical or non-physical assets on a distributed ledger.
  • It explicitly mentions 'real world assets' as the subject of this process.
  • The definition highlights the functionality of issuing, trading, and managing these assets on digital platforms.
sti-portal.fao.org Standard ref
Presence: 4/5
Why this source?
  • The IMF Note (2026) discusses 'Tokenized Finance' and the digital representation of real-world assets on shared ledgers.
  • It explains the integration of ownership, transfer, and compliance into programmable tokens.
  • It identifies tokenized securities (equities, bonds) as digital representations of RWAs.
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