Tokenized stocks may be headed for another wave of popularity, as US broker-dealer Alpaca has announced the launch of its Instant Tokenization Network (ITN). It is building a platform that allows institutional investors to convert traditional stocks into blockchain-based tokens, and back again, at any time, even outside regular market hours.

Alpaca Debuts Instant 24/7 Tokenization of U.S. Stocks

Alpaca’s push into tokenized equities comes with support from major global firms such as Backed (xStocks), Dinari, DRW, Ondo Finance, and others who are joining as initial partners. By debuting at the TOKEN2049 conference in Singapore, Alpaca signaled its intent to bring new liquidity to digital markets and potentially address hurdles that have limited mainstream adoption of tokenized securities.

Unlike earlier initiatives, Alpaca’s ITN promises “in-kind” minting and redemption of tokenized stocks, meaning institutions can directly swap shares for their digital counterparts and back again, sidestepping the slower, costlier process of selling and repurchasing assets in cash. This is expected to help token prices track more closely to their real-world equivalents, addressing persistent concerns about price gaps and illiquidity.

“With today’s launch of ITN, we’re hoping to bring the benefits of in-kind redemptions, like those seen in crypto ETPs, to tokenized stocks,” said Arush Sehgal, Head of Crypto at Alpaca. He described tokenized assets as “something entirely new, requiring a whole new infrastructure stack... In-kind creation and redemption is a significant step forward, but it’s only the first step.”

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Regulatory and Structural Challenges Remain as Industry Expands

The tokenization trend is also drawing attention at the highest levels. At the Singapore conference, Vlad Tenev, CEO of Robinhood, called tokenization a “freight train” that could upend the finance industry, predicting it “will eat the entire financial system.”

Related: “Tokenization Is the Biggest Innovation in Capital Markets": Vlad Tenev Pushes Robinhood Beyond Stocks

Tenev suggested the technology could expand the market for trading everything from stocks to real estate, with broader adoption likely taking root outside the US at first. Robinhood itself rolled out tokenized equities earlier this year, although the move quickly drew regulatory scrutiny in Europe.

Supporters believe tokenization could bring US stocks to a global audience, cut transaction fees, and let investors access previously illiquid markets. However, authorities and industry insiders stress that risks remain. Token holders typically don’t gain voting rights, dividends, or a legal stake in the underlying security unless specifically stated. Regulatory and technological risks remain front of mind for brokerage and crypto service providers alike.

“As TradFi and DeFi continue to merge, it’s important to understand how it will affect market structure and liquidity,” Sam Courtney, the Managing Director for Asia-Pacific at DRW, noted.

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