Alpaca Debuts 24/7 Instant Tokenization of U.S. Shares
Broker-Dealer Pushes Tokenized Equities Market Forward
Alpaca, a US broker-dealer, has introduced an Instant Tokenization Network (ITN) that allows institutions to mint and redeem tokenized US stocks directly, a step designed to ease liquidity constraints in the emerging tokenized equities market. The firm announced the launch on Wednesday.
The ITN enables portfolios to be tokenized with a single API call and allows in-kind redemptions — swapping tokens directly for underlying shares rather than cash — cutting out settlement delays. The service is available around the clock, beyond normal trading hours, and is restricted to US-regulated financial institutions.
“ITN’s process is best understood as a single API that enables two functions,” Arush Sehgal, Alpaca’s head of crypto, told Cointelegraph. “The first is the journaling of securities to and from brokerage accounts. The second is delivery of tokens by the issuer to their Authorized Participant, which is typically a non-US entity affiliated with the US institution that initiated the journaling.”
Investor Takeaway
Regulatory Context and SEC Moves
The launch reflects the US Securities and platform Commission’s recent approval of in-kind creation and redemption for spot BTC and Ether platform-traded funds. Alpaca said its ITN extends that approach to tokenized equities, potentially giving institutions a way to interact with blockchain markets without facing the frictions of cash-based settlement.
The tokenized stock market is currently valued at more than $700 million, according to RWA.xyz. Broader tokenization has gathered momentum, with over $31 billion in real-world assets represented onchain, led by Treasury bonds and private credit. Tokenized stocks are emerging as the next area of focus for institutions and regulators.
SEC Chair Paul Atkins called tokenization an “innovation” in remarks delivered in July, and reports suggest the agency is weighing a framework to allow traditional equities to trade on blockchain networks in a similar manner to cryptocurrencies.
Wall Street and Venture Capital Views
Rob Hadick, a general partner at venture firm Dragonfly, told Cointelegraph at the TOKEN2049 conference in Singapore: “There’s no doubt it has a large effect on TradFi.” He highlighted that institutions are increasingly drawn to features such as 24/7 trading. However, he cautioned that firms want more control over infrastructure. “They want to be able to control things like privacy [and] who the Block confirmer set is, they want to be able to control what is happening in their execution environment,” he said.
Institutional demand for tokenization has already driven projects in private credit and fixed income. Alpaca has supplied infrastructure for Ondo Finance, which tokenizes stocks and ETFs, and xStocks, which offers tokenized equities. Its ITN rollout adds a direct institutional pathway for tokenizing and redeeming shares, potentially expanding the use cases for tokenized assets.
Investor Takeaway
What Comes Next
Alpaca’s move comes as traditional finance and crypto markets converge on tokenization. The broker-dealer, which already powers several tokenized asset platforms, is betting that direct in-kind issuance and redemption will attract institutions viewking speed and liquidity.
For now, the ITN is only open to US-regulated financial institutions. Expansion to global markets will depend on regulators’ stance on tokenized equities and whether platforms, brokers, and custodians adopt similar mechanisms. If regulators advance frameworks allowing tokenized stocks to trade with the identical ease as digital assets, Alpaca’s ahead infrastructure could put it in a competitive position.
