Key Takeaways
- •Alpaca launches the Instant Tokenization Network (ITN), enabling institutions to mint and redeem tokenized US stocks directly and efficiently.
- •The platform supports 24/7 trading and allows in‑kind redemptions, reducing settlement delays and improving liquidity.
- •Alpaca’s innovation aligns with SEC efforts to facilitate in‑kind processes in crypto ETFs, signaling regulatory support for on‑chain securities trading.
- •The tokenization market for real‑world assets surpasses $700 million, gaining momentum among institutional investors and regulators.
Alpaca’s new ITN allows financial institutions to seamlessly tokenize portfolios with a single API call, providing the capability to redeem tokens in‑kind—exchanging them directly for underlying shares without cash settlement delays. This innovation offers traders continuous, around‑the‑clock access, a notable departure from traditional market hours, thereby increasing operational flexibility.
Building upon recent SEC initiatives, the ITN supports in‑kind redemptions — a mechanism the regulator has recently approved for crypto spot Bitcoin and Ether ETFs — to reduce complexities in tokenized asset flows. Alpaca indicated the platform is available exclusively to US‑regulated financial institutions, aimed at strengthening the infrastructure for tokenized securities.
Alpaca’s head of crypto, Arush Sehgal, explained that the ITN acts as a unified API enabling two main functions: the journaling of securities to and from brokerage accounts and the delivery of tokens by the issuer to an authorized participant—usually a non‑U.S. entity affiliated with the initiating U.S. institution. This infrastructure supports the broader move towards mainstream adoption of tokenized assets.
Alpaca has already played a pivotal role in supporting tokenization projects, including Ondo Finance’s stock and ETF platform and xStocks’ tokenized equities, underlining its position as a key enabler in this evolving space.
Wall Street and Regulators Push Toward Asset Tokenization
The trend of tokenizing real‑world assets has surged in 2025, with over $31 billion worth of assets now represented on blockchain networks, according to industry estimates. In the United States, regulators are increasingly supportive; SEC Chair Paul Atkins has described tokenization as an “innovation,” signaling a potential regulatory shift.
Initial phases of tokenization focused on assets like US Treasury bonds and private credit. Now, tokenized stocks are emerging as the next significant frontier, with institutional interest growing amidst favorable regulatory developments. Industry voices suggest that features like 24/7 trading and greater transparency are making tokenized assets attractive to traditional finance but also underscore the need for controlled, compliant infrastructure, particularly concerning privacy and validator governance.
Amid ongoing discussions, the SEC is reportedly exploring frameworks that may permit traditional equities to be traded on blockchain networks, aligning with broader efforts to integrate conventional assets into the crypto ecosystem and facilitate more efficient, transparent markets.
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