TD Securities, a major Canadian investment bank operating across North America, said tokenization may be approaching an institutional turning point after the New York Stock Exchange’s move into tokenized equities.
In recent commentary, Reid Noch, TD Securities’ vice president for electronic trading, said tokenization is starting to carry real implications for market structure, highlighting the NYSE’s proposed tokenized equities alternative trading system (ATS) as a key development. The planned platform would enable 24-hour trading and near-instant settlement of tokenized stocks and exchange-traded funds (ETFs), subject to regulatory approval.
Rather than creating a separate crypto-native marketplace, the venue is designed to work within existing US market rules while using blockchain-based settlement infrastructure. Noch described the structure as closer to a “2.0” market shift: custody and settlement would remain anchored to the Depository Trust & Clearing Corporation (DTCC), while trading would comply with National Best Bid and Offer (NBBO) requirements so prices reflect the best available bids and offers across US exchanges and avoid fragmented liquidity.
Although Noch expects early activity to be retail-driven, TD Securities’ institutional focus suggests broader implications for core market plumbing — including trading hours, collateral management, settlement cycles and liquidity — areas that shape how large financial institutions operate.
Tokenized equities have gained traction following a 2024 acceleration in tokenization led by private credit and US Treasury products, which accounted for much of onchain real-world asset issuance. Despite crypto market volatility, capital inflows into tokenized assets have continued, indicating sustained institutional interest in blockchain-based settlement and ownership models.
More recently, tokenized equities have begun to pick up steam. Kraken’s xStocks platform is among the more visible entrants, reporting more than $25 billion in cumulative trading volume since launching. Although tokenized equities still represent a small fraction of global stock market activity, their growth reflects a broader shift toward bringing traditional financial instruments onchain within regulated frameworks.
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