TD Securities, a major Canadian investment bank with operations across North America, says tokenization may be nearing an institutional tipping point following the New York Stock Exchange’s push to tokenize stocks.
In a recent commentary, Reid Nock, vice president of electronic trading at TD Securities, said tokenization is starting to have a real impact on market structure, pointing to the NYSE’s proposed tokenized alternative trading system (ATS) as a key development.
The planned platform will enable 24-hour trading and near-instant settlement of tokenized stocks and exchange-traded funds (ETFs), subject to regulatory approval.
Rather than creating a parallel crypto-native marketplace, the venue is designed to operate within existing US market rules while leveraging blockchain-based payments infrastructure.
sauce: cointelegraph
Nock explained that this structure is close to a ‘2.0’ market shift, with custody and settlement remaining locked to the Deposit Trust Clearing Company (DTCC) and trading subject to National Best Bid and Offer (NBBO) requirements. This means that prices must reflect the best buy and ask prices available across US exchanges to prevent liquidity fragmentation.
Mr Nock said initial activity was expected to be retail-led, but the broader impact would extend far beyond individual traders.
TD Securities’ focus on institutional investors suggests the firm sees potential impacts on the plumbing of its core markets, including areas that shape how large financial institutions operate, such as trading hours, collateral management, settlement cycles and liquidity.
Tokenized stocks gain institutional traction
According to industry data, tokenization accelerated in 2024, mainly led by private credit and U.S. Treasury products, which account for the majority of on-chain real world asset (RWA) issuance.
Despite widespread volatility in the crypto market, capital inflows into tokenized assets continue, suggesting sustained institutional investor interest in blockchain-based payment and ownership models.
Recently, tokenized stocks have started to gain traction. Kraken’s xStocks platform has emerged as one of the hottest entrants, with cumulative trading volume reported to have exceeded $25 billion since its launch last year.
The market for tokenized stocks is growing rapidly. sauce: RWA.xyz
While tokenized stocks still represent a small portion of global stock market activity, their growth reflects a broader shift to bringing traditional financial instruments on-chain within a regulatory framework.
