Ten years in the past this month, I had dinner with a pal at our favourite hole-in-the-wall Thai restaurant in New York Metropolis.
This pal is a profitable entrepreneur who began one of many largest on-line males’s clothes companies.
I used to be excited to speak to him a couple of cryptocurrency I had simply found referred to as “Ethereum.” I had simply learn the white paper, and I used to be satisfied this could change all the pieces in regards to the monetary world the identical manner the web had remodeled conventional media.
He informed me I used to be loopy.
And his response wasn’t uncommon. On the time, most individuals dismissed it as hype…
However I noticed a system that might change how trillions of {dollars} transfer each day.
And now that imaginative and prescient is lots nearer.
As a result of final week, Nasdaq requested the Securities and Alternate Fee (SEC) for approval to let tokenized shares and ETFs commerce on its most important alternate.
If accepted, these digital shares would sit side-by-side with conventional equities. Which means, they might fall underneath the identical U.S. securities legal guidelines that govern $50 trillion in annual fairness trades.
And this rollout might start as early as 2026, as soon as the Depository Belief Firm — the clearinghouse that settles each U.S. inventory commerce — updates its techniques to deal with digital tokens.
If it occurs, this gained’t be a small tweak to the equipment of finance. It’ll signify the primary main step towards shifting Wall Road onto blockchain infrastructure.
And we don’t need to think about what it would appear like…
As a result of it’s already occurring.
Proof It Works
Earlier this 12 months, Galaxy Digital (Nasdaq: GLXY) grew to become the primary American firm to tokenize its widespread inventory.
It partnered with a fintech startup referred to as Superstate to situation shares on Solana’s blockchain.
These token holders have the identical rights as conventional shareholders. The one distinction is how their trades transfer.
You see, conventional shares take two days to settle. However tokenized shares can settle immediately, 24/7. They will also be transferred throughout borders straight between buyers, with out an middleman.
Now, Galaxy is a tiny firm in comparison with Apple or Microsoft. However it has confirmed {that a} tokenization mannequin can work throughout the U.S. regulatory framework.
That’s why I see tokenization as not simply doable, however inevitable.
Particularly since Nasdaq now desires to take this mannequin and scale it throughout 1000’s of corporations.
This could rework how trillions of {dollars} in shares are traded and settled yearly.
However it’s not the one motive I imagine within the inevitability of tokenization.
You see, whereas Nasdaq is getting ready to carry shares into the digital world, Ethereum is already the go-to community for digital {dollars}.
Stablecoins like USDT and USDC, that are pegged to the U.S. greenback, now whole $165 billion on Ethereum. That’s greater than double the provision since January 2024, and it represents practically 60% of the worldwide stablecoin market.
Final week alone, about $5 billion in new stablecoins have been issued. That’s practically $1 billion a day being added to Ethereum’s community.
And these tokens aren’t merely speculative belongings. They’re used for funds, buying and selling, remittances, and more and more, as a gateway into conventional markets.
One of many greatest gamers on this area is Tether, the corporate behind the stablecoin generally known as USDT. You possibly can consider Tether like a digital financial institution that points dollar-backed tokens.
For each token it places into circulation, it holds an actual asset in reserve. And that asset is normally U.S. authorities debt.
Over time, Tether’s reserves have ballooned. And it’s coming at a essential second for America’s funds.
As a result of international holdings of U.S. debt have declined drastically over the previous 15 years.
In 2011, China, Japan and Canada 23% collectively held 23% of U.S. debt. However by November of final 12 months, that quantity dropped to lower than 6%.
Supply: ARK Funding Administration LLC, 2025, Based mostly on knowledge from TicData/Treasury.gov.8 as of Could 15, 2025.
And the Federal Reserve’s dedication to quantitative tightening means it’s unlikely to be a serious purchaser both.
In the meantime, stablecoins have quietly change into one of many largest patrons of U.S. debt.
Tether now owns practically $100 billion price of U.S. Treasuries. That makes it one of many single largest patrons of America’s short-term debt, forward of many international governments.
And we’re already witnessing the real-world results.
By shopping for so many Treasury payments, Tether helps hold short-term rates of interest decrease than they in any other case can be.
That’s why stablecoins might change into one among our authorities’s most essential strategic belongings over the following decade.
However that’s simply one of many benefits of stablecoins turning into a part of the worldwide monetary system.
Once more, tokenized belongings settle quicker. They cut back charges. And they are often traded globally, at any time of day.
For buyers, meaning decrease prices and higher liquidity.
For corporations, it means entry to new swimming pools of capital that aren’t constrained by geography or banking hours.
Forecasts recommend tokenized belongings might attain as a lot as $16 trillion by 2030, overlaying all the pieces from shares and bonds to actual property and commodities.
Supply: Boston Consulting Group and ADDX
However simply because I imagine tokenization is inevitable doesn’t imply I imagine it’ll occur instantly.
Right here’s My Take
Regulation might be the largest hurdle to tokenization.
Europe has already handed a framework to manipulate digital belongings. However the U.S. continues to be piecing collectively how you can apply current securities legislation to tokenized belongings. And that uncertainty might sluggish adoption.
What’s extra, Wall Road isn’t identified for shifting shortly. Clearinghouses just like the DTC have been constructed for a five-day settlement cycle. This was up to date to a two-day cycle lower than a decade in the past.
Transferring to real-time settlements will imply re-engineering many years of infrastructure. And meaning turning shares and bonds into crypto-style trades gained’t occur in a single day.
However I’m satisfied tokenization will occur.
Inside a decade, I imagine most monetary belongings — from shares to Treasuries to actual property — will exist as digital tokens.
In spite of everything, Galaxy Digital proved it may be finished. Ethereum’s $165 billion stablecoin economic system exhibits it may work at scale. And Nasdaq is getting ready to roll it out throughout Wall Road.
To me, that proves tokenization is inevitable.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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