Ten years in the past this month, I had dinner with a good friend at our favourite hole-in-the-wall Thai restaurant in New York Metropolis.
This good friend 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 few cryptocurrency I had simply found known as “Ethereum.” I had simply learn the white paper, and I used to be satisfied this may change every little thing in regards to the monetary world the identical means the web had reworked conventional media.
He advised 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 quite a bit 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 fundamental trade.
If authorised, these digital shares would sit side-by-side with conventional equities. Which means, they’d fall below 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 programs to deal with digital tokens.
If it occurs, this gained’t be a small tweak to the equipment of finance. It’ll characterize the primary main step towards transferring Wall Avenue onto blockchain infrastructure.
And we don’t need to think about what it’d seem like…
As a result of it’s already occurring.
Proof It Works
Earlier this yr, Galaxy Digital (Nasdaq: GLXY) turned the primary American firm to tokenize its widespread inventory.
It partnered with a fintech startup known as Superstate to subject 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 can be transferred throughout borders instantly between traders, with out an middleman.
Now, Galaxy is a tiny firm in comparison with Apple or Microsoft. But it surely 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 firms.
This might remodel how trillions of {dollars} in shares are traded and settled yearly.
But it surely’s not the one cause I consider within the inevitability of tokenization.
You see, whereas Nasdaq is getting ready to convey 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 availability since January 2024, and it represents almost 60% of the worldwide stablecoin market.
Final week alone, about $5 billion in new stablecoins had been issued. That’s almost $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 largest gamers on this area is Tether, the corporate behind the stablecoin often 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 often U.S. authorities debt.
Over time, Tether’s reserves have ballooned. And it’s coming at a crucial second for America’s funds.
As a result of overseas 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 yr, that quantity dropped to lower than 6%.
Supply: ARK Funding Administration LLC, 2025, Primarily based on knowledge from TicData/Treasury.gov.8 as of Might 15, 2025.
And the Federal Reserve’s dedication to quantitative tightening means it’s unlikely to be a significant purchaser both.
In the meantime, stablecoins have quietly turn into one of many largest patrons of U.S. debt.
Tether now owns almost $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 overseas 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 turn into one in every of our authorities’s most vital 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 scale back charges. And they are often traded globally, at any time of day.
For traders, meaning decrease prices and higher liquidity.
For firms, 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 every little thing from shares and bonds to actual property and commodities.
Supply: Boston Consulting Group and ADDX
However simply because I consider tokenization is inevitable doesn’t imply I consider it would occur instantly.
Right here’s My Take
Regulation might be the most important hurdle to tokenization.
Europe has already handed a framework to manipulate digital belongings. However the U.S. remains to be piecing collectively the right way to apply present securities legislation to tokenized belongings. And that uncertainty might gradual adoption.
What’s extra, Wall Avenue isn’t identified for transferring rapidly. Clearinghouses just like the DTC had 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.
Shifting to real-time settlements will imply re-engineering a long time 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 consider most monetary belongings — from shares to Treasuries to actual property — will exist as digital tokens.
In any case, Galaxy Digital proved it may be completed. Ethereum’s $165 billion stablecoin economic system reveals it might probably work at scale. And Nasdaq is getting ready to roll it out throughout Wall Avenue.
To me, that proves tokenization is inevitable.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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