Tokenized
stocks may be headed for another wave of popularity, as US broker-dealer Alpaca
has announced the launch of its Instant Tokenization Network (ITN). It is
building a platform that allows institutional investors to convert traditional
stocks into blockchain-based tokens, and back again, at any time, even outside
regular market hours.
Alpaca Debuts Instant 24/7
Tokenization of U.S. Stocks
Alpaca’s
push into tokenized equities comes with support from major global firms such as
Backed (xStocks),
Dinari, DRW, Ondo Finance, and others who are joining as initial partners. By
debuting at the TOKEN2049 conference in Singapore, Alpaca signaled its intent
to bring new liquidity to digital markets and potentially address hurdles that
have limited mainstream adoption of tokenized securities.
Unlike
earlier initiatives, Alpaca’s ITN promises “in-kind” minting and redemption of
tokenized stocks, meaning institutions can directly swap shares for their
digital counterparts and back again, sidestepping the slower, costlier process
of selling and repurchasing assets in cash. This is expected to help token
prices track more closely to their real-world equivalents, addressing
persistent concerns about price gaps and illiquidity.
“With
today’s launch of ITN, we’re hoping to bring the benefits of in-kind
redemptions, like those seen in crypto ETPs, to tokenized stocks,” said Arush
Sehgal, Head of Crypto at Alpaca.
He described tokenized assets as “something entirely new, requiring a whole new
infrastructure stack... In-kind creation and redemption is a significant step
forward, but it’s only the first step.”
You may
also like: US
Broker Alpaca Wins Options and Fixed Income Clearing Memberships
Regulatory and Structural
Challenges Remain as Industry Expands
The
tokenization trend is also drawing attention at the highest levels. At the
Singapore conference, Vlad Tenev, CEO of Robinhood, called tokenization a
“freight train” that could upend the finance industry, predicting it “will eat
the entire financial system.”
Related: “Tokenization
Is the Biggest Innovation in Capital Markets": Vlad Tenev Pushes Robinhood
Beyond Stocks
Tenev
suggested the technology could expand the market for trading everything from
stocks to real estate, with broader adoption likely taking root outside the US
at first. Robinhood itself rolled out tokenized equities earlier
this year, although the move quickly drew
regulatory scrutiny in Europe.
Supporters
believe tokenization could bring US stocks to a global audience, cut
transaction fees, and let investors access previously illiquid markets.
However, authorities and industry insiders stress that risks remain. Token
holders typically don’t gain voting rights, dividends, or a legal stake in
the underlying security unless specifically stated. Regulatory and
technological risks remain front of mind for brokerage and crypto service
providers alike.
“As TradFi
and DeFi continue to merge, it’s important to understand how it will affect
market structure and liquidity,” Sam Courtney, the Managing Director for
Asia-Pacific at DRW, noted.
Read other stories on tokenization:
Tokenized
stocks may be headed for another wave of popularity, as US broker-dealer Alpaca
has announced the launch of its Instant Tokenization Network (ITN). It is
building a platform that allows institutional investors to convert traditional
stocks into blockchain-based tokens, and back again, at any time, even outside
regular market hours.
Alpaca Debuts Instant 24/7
Tokenization of U.S. Stocks
Alpaca’s
push into tokenized equities comes with support from major global firms such as
Backed (xStocks),
Dinari, DRW, Ondo Finance, and others who are joining as initial partners. By
debuting at the TOKEN2049 conference in Singapore, Alpaca signaled its intent
to bring new liquidity to digital markets and potentially address hurdles that
have limited mainstream adoption of tokenized securities.
Unlike
earlier initiatives, Alpaca’s ITN promises “in-kind” minting and redemption of
tokenized stocks, meaning institutions can directly swap shares for their
digital counterparts and back again, sidestepping the slower, costlier process
of selling and repurchasing assets in cash. This is expected to help token
prices track more closely to their real-world equivalents, addressing
persistent concerns about price gaps and illiquidity.
“With
today’s launch of ITN, we’re hoping to bring the benefits of in-kind
redemptions, like those seen in crypto ETPs, to tokenized stocks,” said Arush
Sehgal, Head of Crypto at Alpaca.
He described tokenized assets as “something entirely new, requiring a whole new
infrastructure stack... In-kind creation and redemption is a significant step
forward, but it’s only the first step.”
You may
also like: US
Broker Alpaca Wins Options and Fixed Income Clearing Memberships
Regulatory and Structural
Challenges Remain as Industry Expands
The
tokenization trend is also drawing attention at the highest levels. At the
Singapore conference, Vlad Tenev, CEO of Robinhood, called tokenization a
“freight train” that could upend the finance industry, predicting it “will eat
the entire financial system.”
Related: “Tokenization
Is the Biggest Innovation in Capital Markets": Vlad Tenev Pushes Robinhood
Beyond Stocks
Tenev
suggested the technology could expand the market for trading everything from
stocks to real estate, with broader adoption likely taking root outside the US
at first. Robinhood itself rolled out tokenized equities earlier
this year, although the move quickly drew
regulatory scrutiny in Europe.
Supporters
believe tokenization could bring US stocks to a global audience, cut
transaction fees, and let investors access previously illiquid markets.
However, authorities and industry insiders stress that risks remain. Token
holders typically don’t gain voting rights, dividends, or a legal stake in
the underlying security unless specifically stated. Regulatory and
technological risks remain front of mind for brokerage and crypto service
providers alike.
“As TradFi
and DeFi continue to merge, it’s important to understand how it will affect
market structure and liquidity,” Sam Courtney, the Managing Director for
Asia-Pacific at DRW, noted.
Read other stories on tokenization:
