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Crypto's Audacious Bid to Rebuild Stock Market on the Blockchain
Crypto's Audacious Bid to Rebuild Stock Market on the Blockchain

Yahoo

time9 hours ago

  • Business
  • Yahoo

Crypto's Audacious Bid to Rebuild Stock Market on the Blockchain

(Bloomberg) -- First, they came for the currency market. Then, the money market. Now, crypto's big disruptors are targeting the multi-trillion-dollar heart of global capitalism: the stock market. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares US Renters Face Storm of Rising Costs Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Mapping the Architectural History of New York's Chinatown US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Dismissed as a fringe fantasy years ago after a regulatory backlash and the collapse of early projects, the first attempts by the digital-asset industry to put shares on the blockchain fizzled out. This time, a new cohort of players — from crypto giants Coinbase Global Inc. and Kraken to retail favorite Robinhood Markets Inc. — is making a fresh run at rewiring the very plumbing that governs equities around the world. The ambition is predictably audacious from a crypto community built to gut out the middlemen and outsmart the regulator. The promise: a financial system where trading Apple Inc. or Tesla Inc. stock is as fast and easy as sending a text message. No more extended settlement periods. Just instant, cross-border transactions, around the clock, five, or even seven, days a week. But beneath the braggadocio lies profound challenges that threaten this tokenization effort, or the process of creating digital representations of real-world assets on a decentralized network. The effort runs straight into custody and counterparty risk: each token is typically backed by a real-world share that must be funded and held in custody. Stock investing also involves a complex web of legal protections, ownership structures and corporate actions deeply embedded in centralized, regulated systems. This world of complexity makes tokenizing stocks a world away from the likes of digital art. 'You are changing the way things are trading,' said Bryan Routledge, an associate professor of finance at Carnegie Mellon University's Tepper School of Business. 'You're not just changing the format of an asset.' Despite the hurdles — and fundamental questions about whether demand for these products even exists — players are lining up. Kraken's Bermuda entity plans to start selling tokenized stocks in late June, and Robinhood is preparing a similar service in Europe. Many such efforts are debuting in overseas jurisdictions, seen as crucial test beds while the US regulatory picture remains in flux. Startups like Ondo Finance are planning launches this summer, and Dinari hopes to offer tokenized equities trading in the US in the coming months. Galaxy Digital has been talking with regulators about tokenizing its shares. Securitize, a digital-asset securities platform known for helping BlackRock Inc. digitize a money-market strategy, is another key player at the center of the push. 'We are talking to many different asset issuers of both existing publicly traded equities as well as about a lot of organizations thinking about doing on-chain IPOs,' said Michael Sonnenshein, chief operating officer of Securitize. The token, stored in a crypto wallet like an e-ticket on a phone, is a unique, transferable digital receipt. It's the verifiable proof of a claim on one real share, held in trust by a regulated financial institution. Whether it truly mirrors a stock's price comes down to a simple test: can it be swapped for the real thing? In the safest setups, the answer is yes, which keeps prices in sync. But often, the token is just a digital I.O.U. from the issuer, and its value depends entirely on trusting that company to pay up. The initiative isn't happening in a vacuum. It's one front in a broader effort to move real-world financial assets onto blockchains, a market McKinsey & Co. projects could reach $2 trillion by 2030. So far, the clearest successes have been in tokenizing assets with simpler plumbing. The market for on-chain US Treasuries, led by firms like Securitize and Ondo, now exceeds several billion dollars. Major players like BlackRock and Citigroup are actively digitizing funds to improve efficiency and appeal to crypto-friendly users. But tackling public equities is a higher order of ambition, targeting the dynamic, live-wire infrastructure of capitalism itself, where corporate actions like mergers, stock splits, and shareholder votes happen in real time. Fueling the push, the election of Donald Trump has raised hopes among proponents that their plans can achieve critical mass with regulators. Hester Peirce, who leads the Securities and Exchange Commission's crypto task force, has spoken favorably about tokenization in recent months, suggesting that trial runs in contained settings — known as 'sandbox structures,' where firms can operate under relaxed rules to test new models — may be a way to test the concept. That way, 'innovating firms are able to get to market quickly under appropriate, reasonably calibrated conditions,' she said in a May 8 address. 'They do not have to comply with inapt regulations, which, in many cases, were developed well before the technologies being tested existed and may be obviated by attributes of that technology.' Still, as each player builds its own token with a unique risk profile, it's an open question whether the industry will manage to create a unified and liquid market. Regulators' caution is rooted in recent history. The idea of a blockchain-based stock was broached as far back as 2015 by the former chief of but efforts have remained niche. Back in 2021, Exodus Movement Inc. tokenized its shares via Securitize, yet today those shares still account for around 78% of all tokenized equities. The total market stands at just $388 million, according to tracker a fraction of the $120 trillion-plus global equities market. A more ominous precedent was set by the Mirror Protocol on the Terra blockchain, which drew SEC scrutiny even before Terra's collapse triggered some $40 billion in losses. That history explains the establishment's measured pace. Depository Trust & Clearing Corp., which settles most US stock trades, is treading lightly, with a planned pilot later this year expected to involve a small cohort of institutional players in a controlled setting. 'We have no desire to do this in a big bang,' said Nadine Chakar, global head of DTCC Digital Assets. Proponents argue the push creates new rails for global finance. In places with unreliable financial systems, the appeal of direct access to US equities is clear. The vision, according to DTCC's Chakar, is one of 24-hour trading, faster settlement, and the ability to use stocks as collateral in decentralized apps. This resonates with crypto-native investors who, according to Wyatt Lonergan of VanEck Ventures, 'want the comfort of, say, Apple stock' within their digital ecosystem, especially during volatile crypto markets. But for the average US investor, these are largely solved problems, with fractional shares and one-day settlement already standard. This raises the central, unanswered question of whether this represents genuine, scalable demand or simply a convenient narrative. With no real evidence that mainstream investors are asking for these products, the tokens risk being viewed as just the latest shiny digital object for platforms in a constant search for new revenue streams. All told, it's the latest offensive in crypto's war on Wall Street. The industry is riding a $3 trillion bull market, a political thaw in Washington, and fresh momentum in infrastructure. 'It definitely will be competition,' Routledge said, predicting a clash with the entire ecosystem of exchanges and brokers. 'If you look at the growth of trading in cryptocurrencies, it was this analog of tokenization that really lit the fuse.' America's Top Consumer-Sentiment Economist Is Worried How to Steal a House Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push Apple Test-Drives Big-Screen Movie Strategy With F1 Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags ©2025 Bloomberg L.P. Sign in to access your portfolio

Tokenized Apple stock? Reserve co-founder says it's been possible for a decade
Tokenized Apple stock? Reserve co-founder says it's been possible for a decade

Yahoo

time9 hours ago

  • Business
  • Yahoo

Tokenized Apple stock? Reserve co-founder says it's been possible for a decade

Tokenized Apple stock? Reserve co-founder says it's been possible for a decade originally appeared on TheStreet. Reserve co-founder Nevin Freeman told TheStreet Roundtable that while blockchain is technically ready to host equities and bonds, the real barrier is regulation. 'It's really just a question of the regulatory path to doing so,' he said, noting that tokenized versions of traditional assets have stalled in the United States despite mature technology. Freeman pointed to SEC Chairman Paul Atkins's recent directive: 'I have directed the staff to consider a conditional exemptive relief framework or 'innovation exemption' that would expeditiously allow registrants and non-registrants to bring on-chain products and services to market.' He then explained that the crypto task force has been developing this very framework to let firms experiment under limited relief. Join the discussion with CryptoWendyO on. Freeman shared that during a two-hour meeting in Washington, task-force members were 'very excited' by Reserve's Digital Securities Initiative proposal and told him it was 'exactly the kind of thing they want to see tried' under the new exemption. To prepare for sandbox trials, Reserve launched the Digital Securities Initiative — an open working group drafting a full market-structure model for on-chain securities. Freeman described it as 'a comprehensive proposal for what DeFi market structure could look like that incorporates regulatory functions.' He invited industry participants to review the hour-long presentation at and collaborate on refining the sandbox rules. Once regulators finalize the Innovation Exemption Plan, Reserve can instantly absorb any approved tokenized assets — whether BlackRock's on-chain treasury tokens or future tokenized equities and bonds — into its decentralized token folios. Freeman said conversations with asset managers are already underway, but success depends on the SEC's willingness to let firms experiment under the new exemption. Join the discussion with Scott Melker on. Looking ahead, Freeman expressed optimism that the 'Innovation Exemption Plan' will bridge decentralized finance and traditional markets. 'Technologically, we could have tokenized Apple stock almost a decade ago,' he noted — but it took a clear regulatory framework to make it possible. With the SEC's sandbox on the horizon, tokenized securities may finally have a runway to mainstream adoption. Tokenized Apple stock? Reserve co-founder says it's been possible for a decade first appeared on TheStreet on Jun 27, 2025 This story was originally reported by TheStreet on Jun 27, 2025, where it first appeared. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Hong Kong reveals new stablecoin rules and tokenized bond plans
Hong Kong reveals new stablecoin rules and tokenized bond plans

Crypto Insight

time20 hours ago

  • Business
  • Crypto Insight

Hong Kong reveals new stablecoin rules and tokenized bond plans

Hong Kong's latest digital asset blueprint places stablecoin regulation and asset tokenization at the heart of its strategy to become a global crypto and fintech hub. The policy statement, issued on Thursday, introduces a framework known as 'LEAP,' targeting legal clarity, ecosystem expansion, real-world applications and talent development. It builds on the foundation laid by the government's first policy statement in October 2022. As part of the new framework, the government will implement a licensing regime for stablecoin issuers starting Aug. 1, which 'will facilitate the development of real-world use cases.' The Securities and Futures Commission (SFC) will oversee licensing for digital asset (DA) dealing and custody providers, while the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority will lead a legal review to support the tokenization of real-world assets (RWAs). Hong Kong to regulate tokenized bonds The government also plans to 'regularise the issuance of tokenized Government bonds' and promote tokenized ETFs by clarifying their stamp duty treatment. 'With that, the Government welcomes the introduction of secondary market trading of these tokenized ETFs on licensed DA trading platforms or through other channels,' the policy statement said. Beyond bonds and funds, the government said it aims to incentivize tokenization across broader sectors, including metals and renewable energy assets, demonstrating 'the versatility of this technology across sectors such as precious metals (e.g., gold)… and solar panels.' The policy also includes new measures to boost innovation, such as a Cyberport funding program aimed at supporting standout blockchain and digital asset projects. In a statement, Financial Secretary Paul Chan said the new framework 'showcases the practical use of tokenization' and aims to 'build a more flourishing DA ecosystem which will integrate the real economy with social life.' The government said it will soon launch public consultations on new licensing regimes. Hong Kong eyes crypto derivatives Earlier this month, Hong Kong's financial authorities said they were preparing to introduce digital asset derivatives trading for professional investors. The initiative follows recent approvals for spot crypto ETFs, futures products and staking services, including a green light for HashKey to offer staking in April, as the city positions itself as a leading digital finance hub. In May, the city's Legislative Council passed the Stablecoin Bill, paving the way for a regulated framework that could position the region as a global leader in digital assets and Web3 development. Source:

Real-World Asset Tokenization Market Has Grown Almost Fivefold in 3 Years
Real-World Asset Tokenization Market Has Grown Almost Fivefold in 3 Years

Yahoo

timea day ago

  • Business
  • Yahoo

Real-World Asset Tokenization Market Has Grown Almost Fivefold in 3 Years

The real-world asset (RWA) tokenization market has grown by 380% in just three years, reaching $24 billion this month in a sign that traditional finance is finding benefits from embracing blockchain technology, according to a report from RedStone, Gauntlet and "Asset tokenization has decisively transitioned from experimental pilots to scaled institutional adoption in 2024-2025," the Real-World Assets in On-chain Finance Report concluded. Tokenization refers to representing real-world assets such as stocks and bonds as tokens that can be bought, sold and traded on blockchains, with the goal of reducing some of the costs and inefficiencies associated with legacy infrastructure. Projections for how large this market could grow to vary wildly, but many seem to involve a number multiple that starts with a "t." McKinsey predicts it to become a $2 trillion market, while BCG estimates $16 trillion by 2030. The report by RedStone et al cites Standard Chartered's projection of it growing to some $30 trillion by 2034. "The RWA market's explosive growth is not just impressive number — it's evidence that traditional finance is finding genuine utility in blockchain infrastructure. From BlackRock's $2.9 billion BUIDL fund to Apollo's ACRED private credit tokenization, we're witnessing the early stages of what could be the largest capital migration in financial history," the report said. While stablecoins, tokens pegged to the value of a traditional financial asset such as a fiat currency, are not typically regarded as RWA tokenization, the report argues that real-world assets could serve a similar role. U.S. Treasury Secretary Scott Bessent has said that stablecoins could bolster U.S. dollar supremacy, a sentiment that could equally apply to tokenized Treasuries. "These words should be interpreted within the broader U.S.-denominated RWA category — tokenized Treasuries directly help finance government operations and manage public debt levels, while tokenized corporate bonds and private credit strengthen dollar dominance by expanding USD-denominated investment opportunities in the global digital economy," the report in to access your portfolio

What's Next for Tokenization?
What's Next for Tokenization?

Yahoo

timea day ago

  • Business
  • Yahoo

What's Next for Tokenization?

To many of us in and around crypto, this time feels different. Tokenization of financial assets has arrived in ways that we haven't previously seen. As we charge ahead, it's important to zoom out, slow down—something our industry is not known for—and take a snapshot of today and where we are going tomorrow. While tokenization is revolutionary for financial markets, its adoption to date has been evolutionary. First, we had stablecoins as a more efficient means of payment. Then we had tokenized money market funds as a more efficient store of value. What's next? Structured credit coupled with private funds. As with previous technological waves of adoption, tokenization will come slowly and then all at once. Buckle up: we are about to enter the vertical slope of the S-curve. Since the last crypto market cycle in 2021, stablecoins have demonstrated clear product-market fit. With more than $250 billion in circulating supply, stablecoins continue to demonstrate long-term demand and utility. That includes Tether and USDC for cross-border payments through companies such as MoneyGram, Stripe, PayPal, and Felix; overseas dollar access in emerging economies and those with weaker currency regimes such as Nigeria, Venezuela, Turkey, and others; and as the key trading pairs for crypto trades including Bitcoin and Ethereum. Regulatory clarity, particularly passage of the GENIUS Act in the U.S. covering stablecoins, can only accelerate this trend. The outsized demand for Circle's stock following its IPO is another positive sign. Tokenized money market funds bring a technological and financial upgrade for storage of value on-chain. Market leaders including BUIDL, BENJI, ONDO, and others have shown there is clear demand for the risk-free rate onchain. That means not only as a collateral and treasury instrument, but also as a stablecoin substitute for crypto-native players that need fiat-denominated liquidity. While the initial versions offer hybrid structures with the fund tokens mirroring traditional transfer agents and off-chain shares, we are beginning to see token-native issuances percolate across the industry. Given that tokenization has demonstrated a more efficient method to move and store value, what parts of the industry are next? To start, we have seen industry leaders tokenize private funds—such as Apollo's ACRED, Hamilton Lane's tokenized fund with Republic, multiple on-chain funds offered by WisdomTree, and others—that have begun to show utility through transparency, DeFi lending, and liquidity improvements. The value that tokenization is bringing today to different fund structures only scratches the surface of what is possible, but as DeFi and TradFi overlap more and more, utility is likely to take off. Structured credit is an ideal candidate for tokenization. Traditionally, it can be complex, opaque, involve multiple counterparties, and can be comparatively expensive to issue and operate. Smart contracts not only streamline and automate debt servicing of a loan pool, for example, but also follow a preprogrammed waterfall for each investor tranche. Couple that with instant settlement within the structure and the cost basis can drop substantially. And, because the structure is on-chain, we won't have the lack of transparency that plagued the financial system in 2008. At the issuer's discretion, holders of on-chain structured credit products could see the performance of the underlying in real time, 24/7. This transparency is not only transformative for regulators to better monitor underlying risks, but it also increases collateral acceptance by standardizing and providing more information to lenders. This combination of value and information will mean a more liquid secondary market for these assets as well. While larger traditional institutions can offer some of these benefits—such as transparency or their own secondary marketplaces—tokenization has the potential to bring this all together and standardize it beyond today's walled gardens. Discussion around tokenizing equities has taken off in 2025. Though companies, including INX and Backed, have tokenized stocks before, regulatory discussions with Security and Exchange Commission's Crypto Task Force have hastened the adoption timeline. Superstate, Kraken, and we at Galaxy have all announced stock tokenization initiatives to continue to push the industry forward. While the industry has made progress, several challenges lie ahead. The US still lacks the stablecoin and market infrastructure bills that are needed—though the GENIUS's passage in the Senate is a notable step forward. Solving KYC/AML remains a barrier holding the technology back from adoption at scale; private chains are too limiting and public chain structures without adequate KYC/AML are challenging for TradFi to adopt. Instead, the industry will have to land in the middle, leveraging the benefits of public chains with the regulatory and trust-based KYC policies that our financial system is built on today. Education on the technology's potential also remains a hurdle. The industry must continue to highlight material use cases and tangible benefits that tokenization can bring not just to traditional finance but entirely new opportunities and structures that couldn't exist before. What should we take away from this time? First, we have come a long way from the initial bitcoin transactions and ethereum smart contracts that formed a cornerstone of crypto; now, the industry has partnerships with the biggest names in finance, payments, and technology that lead the global economy today. Second, we are at the bottom of the second inning—we've put some points on the board, but this is just the start. Adoption at scale will require a pairing of the revolutionary benefits of this technology with the timeless trust that has been the bedrock of the financial industry since its founding. This balance of technology and trust is core to achieving the potential of tokenization in finance: to do for value what the internet did for information. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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