Despite the hype around the NYSE's tokenization platform, its value is limited because the legal root of truth for share ownership remains analog. Without states recognizing on-chain corporate registrations and share issuance, these tokens are merely representations, not truly native digital securities.
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BitGo's CEO predicts that tokenized equities will disrupt traditional IPOs by creating an open, innovative ecosystem. This technology allows issuers to form a direct, programmable relationship with shareholders, bypassing intermediaries to offer unique incentives and foster deeper engagement.
A complete shift of financial assets to blockchain is imminent. This won't happen on transparent chains like Ethereum, but on purpose-built networks like Canton. The key enabler is configurable privacy, a feature that allows financial institutions to transact without broadcasting their proprietary positions to the entire world.
Unlike competitors using crypto to operate outside regulatory frameworks, Kalshi's CEO views on-chain technology as a tool to enhance a regulated system. He envisions using it for clearing to improve immutability and transparency, enabling a permissionless ecosystem built upon a compliant foundation.
While tokenizing private stock could create liquidity for early investors, Coinbase CEO Brian Armstrong emphasizes the need for company permission. This prevents premature liquidation that could undermine vesting schedules and other crucial employee retention incentives before an IPO.
The key to tokenization is combining two worlds: traditional finance's expertise in legally custodying assets, and crypto's native, free infrastructure for 24/7 trading and liquidity. This fusion makes it possible to make previously untradable assets like private equity, art, or collectibles instantly liquid and accessible.
The last decade of crypto focused on moving assets like Bitcoin on-chain. The next, more significant mega-trend will be the migration of entire companies and their real-world revenue streams onto blockchains, involving both crypto-native firms and traditional giants like BlackRock and Stripe.
Polymarket's major backing from the NYSE's parent company validates the trend of turning all information and events into liquid, tokenized markets. This "financialization of everything" will disrupt established industries, from sports betting to traditional finance, by offering more efficient, decentralized alternatives.
The next evolution in fintech will be regulated applications that offer seamless trading across traditional securities, tokenized assets, and native crypto. This framework allows direct user access to DeFi protocols like staking and lending from a single, compliant, and user-friendly platform, bridging the gap between two currently separate financial worlds.
Creating synthetic derivatives (like perpetual futures) of traditional assets on-chain is more scalable and efficient than creating direct tokenized copies. This is especially true for assets with high derivative demand, such as emerging market equities.
The "market structure" debate in crypto regulation is about updating pre-internet laws. These laws require intermediaries like broker-dealers for trust, but blockchain makes them obsolete through cryptographic verification, creating legislative tension.
