Tokenization: Redefining Capital Markets

Introduction

Tokenization refers to representing ownership of an asset on a blockchain through digital tokens. These tokens can represent financial assets (equities, bonds, money‑market funds), real‑world assets (real estate, art, invoices) or even cash itself (stablecoins or deposit tokens). By moving assets onto programmable, always‑on blockchains, tokenization promises to reduce settlement friction, improve transparency and allow 24/7, global access to capital markets. During TOKEN2049 and subsequent discussions in 2024‑2025, leaders from crypto and traditional finance explored how tokenization could reshape capital markets.

Below is a deep dive into the visions and predictions of key participants from the “Tokenization: Redefining Capital Markets” panel and related interviews: Diogo Mónica (General Partner, Haun Ventures), Cynthia Lo Bessette (Head of Digital Asset Management, Fidelity Investments), Shan Aggarwal (Chief Business Officer, Coinbase), Alex Thorn (Head of Research, Galaxy), and Arjun Sethi (Co‑CEO, Kraken). The report also situates their views within broader developments such as tokenized treasury funds, stablecoins, deposit tokens and tokenized equities.

1. Diogo Mónica – General Partner, Haun Ventures

1.1 Vision: Stablecoins Are the “Starting Gun” for Tokenization

Diogo Mónica argues that well‑regulated stablecoins are the prerequisite for tokenizing capital markets. In an opinion piece for American Banker he wrote that stablecoins turn money into programmable digital tokens, unlocking 24/7 trading and enabling tokenization of many asset classes. Once money is on‑chain, “you open the door to tokenize everything else – equities, bonds, real estate, invoices, art”. Mónica notes that a few technologically advanced stablecoins already facilitate near‑instant, cheap cross‑border transfers; but regulatory clarity is needed to ensure wide adoption. He emphasizes that stablecoin regulations should be strict—modeled on the regulatory regime for money‑market funds—to ensure consumer protection.

1.2 Tokenization Will Revive Capital Formation and Globalize Markets

Mónica contends that tokenization could “fix” broken capital‑formation mechanisms. Traditional IPOs are expensive and restricted to certain markets; however, issuing tokenized securities could let companies raise capital on‑chain, with global access and lower costs. Transparent, always‑open markets could allow investors worldwide to trade tokens representing equity or other assets regardless of geographic boundaries. For Mónica, the goal is not to circumvent regulation but to create new regulatory frameworks that enable on‑chain capital markets. He argues that tokenized markets could boost liquidity for traditionally illiquid assets (e.g., real estate, small‑business shares) and democratize investment opportunities. He stresses that regulators need to build consistent rules for issuing, trading and transferring tokenized securities so that investors and issuers gain confidence in on‑chain markets.

1.3 Encouraging Startups and Institutional Adoption

As a venture capitalist at Haun Ventures, Mónica encourages startups working on infrastructure for tokenized assets. He highlights the importance of compliant digital identity and custody solutions, on‑chain governance and interoperable blockchains that can support large volumes. Mónica sees stablecoins as the first step, but he believes the next phase will be tokenized money‑market funds and on‑chain treasuries—building blocks for full‑scale capital markets.

2. Cynthia Lo Bessette – Head of Digital Asset Management, Fidelity Investments

2.1 Tokenization Delivers Transactional Efficiency and Access

Cynthia Lo Bessette leads Fidelity’s digital asset management business and is responsible for developing tokenization initiatives. She argues that tokenization improves settlement efficiency and broadens access to markets. In interviews about Fidelity’s planned tokenized money‑market fund, Lo Bessette stated that tokenizing assets can “drive transactional efficiencies” and improve access and allocation of capital across markets. She noted that tokenized assets could be used as non‑cash collateral to enhance capital efficiency, and said that Fidelity wants to “be an innovator… [and] leverage technology to provide better access”.

2.2 Fidelity’s Tokenized Money‑Market Fund

In 2024, Fidelity filed with the SEC to launch the Fidelity Treasury Digital Fund, a tokenized money‑market fund on the Ethereum blockchain. The fund issues shares as ERC‑20 tokens that represent fractional interests in a pool of government treasuries. The goal is to provide 24‑hour subscription and redemption, atomic settlement and programmable compliance. Lo Bessette explained that tokenizing treasuries can improve operational infrastructure, reduce the need for intermediaries and open the fund to a wider audience, including firms seeking on‑chain collateral. By offering a tokenized version of a core money‑market instrument, Fidelity wants to attract institutions exploring on‑chain financing.

2.3 Regulatory Engagement

Lo Bessette cautions that regulation is critical. Fidelity is working with regulators to ensure investor protections and compliance. She believes that close collaboration with the SEC and industry bodies will be necessary to gain approval for tokenized mutual funds and other regulated products. Fidelity also participates in industry initiatives such as the Tokenized Asset Coalition to develop standards for custody, disclosure and investor protection.

3. Shan Aggarwal – Chief Business Officer, Coinbase

3.1 Expanding Beyond Crypto Trading to On‑Chain Finance

As Coinbase’s first CBO, Shan Aggarwal is responsible for strategy and new business lines. He has articulated a vision where Coinbase becomes the “AWS of crypto infrastructure”, providing custody, staking, compliance and tokenization services for institutions and developers. In an interview (translated from Forbes), Aggarwal said he sees Coinbase’s role as supporting the on‑chain economy by building the infrastructure to tokenize real‑world assets, bridge traditional finance with Web3 and offer financial services like lending, payments and remittances. He notes that Coinbase wants to define the future of money rather than just participate in it.

3.2 Stablecoins Are the Native Payment Rail for AI Agents and Global Commerce

Aggarwal believes stablecoins will become the native settlement layer for both humans and AI. In a 2024 interview, he said that stablecoins enable global payments without intermediaries; as AI agents proliferate in commerce, “stablecoins are the native payment rails for AI agents”. He predicts that stablecoin payments will become so embedded in commerce that consumers and machines will use them without noticing, unlocking digital commerce for billions.

Aggarwal contends that all asset classes will eventually come on‑chain. He points out that tokenizing assets such as equities, treasuries or real estate allows them to be settled instantaneously and traded globally. He acknowledges that regulatory clarity and robust infrastructure are prerequisites, but he sees an inevitable shift from legacy clearing systems to blockchains.

3.3 Building Institutional Adoption and Compliance

Aggarwal emphasizes that institutions need secure custody, compliance services and reliable infrastructure to adopt tokenization. Coinbase has invested in Coinbase International Exchange, Base (its L2 network), and partnerships with stablecoin issuers (e.g., USDC). He suggests that as more assets become tokenized, Coinbase will provide “one‑stop‑shop” infrastructure for trading, financing and on‑chain operations. Importantly, Aggarwal works closely with policymakers to ensure regulation enables innovation without stifling growth.

4. Alex Thorn – Head of Research, Galaxy

4.1 Tokenized Equities: A First Step in a New Capital Markets Infrastructure

Alex Thorn leads research at Galaxy and has been instrumental in the firm’s decision to tokenize its own shares. In September 2024, Galaxy announced it would allow shareholders to move their Galaxy Class A shares onto the Solana blockchain via a tokenization partnership with Superstate. Thorn explained that tokenized shares confer the same legal and economic rights as traditional shares, but they can be transferred peer‑to‑peer and settle in minutes rather than days. He said that tokenized equities are “a new method of building faster, more efficient, more inclusive capital markets”.

4.2 Working Within Existing Regulation and with the SEC

Thorn stresses the importance of compliance. Galaxy built its tokenized share program to comply with U.S. securities laws: the tokenized shares are issued under a transfer agent, the tokens can only be transferred among KYC‑approved wallets, and redemptions occur via a regulated broker. Thorn said Galaxy wants to “work within existing rules” and will collaborate with the SEC to develop frameworks for on‑chain equities. He views this process as vital to convincing regulators that tokenization can protect investors while delivering efficiency gains.

4.3 Critical Perspective on Deposit Tokens and Unapproved Offerings

Thorn has expressed caution about other forms of tokenization. Discussing bank‑issued deposit tokens, he compared the current landscape to the 1830s “wildcat banking” era and warned that deposit tokens may not be widely adopted if each bank issues its own token. He argued that regulators might treat deposit tokens as regulated stablecoins and require a single, rigid federal standard to make them fungible.

Similarly, he criticized pre‑IPO token offerings launched without issuer consent. In an interview about Jupiter’s pre‑IPO token of Robinhood stock, Thorn noted that many pre‑IPO tokens are unauthorized and “don’t offer clean share ownership”. For Thorn, tokenization must occur with issuer approval and regulatory compliance; unauthorized tokenization undermines investor protections and could harm public perception.

5. Arjun Sethi – Co‑CEO, Kraken

5.1 Tokenized Equities Will Outgrow Stablecoins and Democratize Ownership

Arjun Sethi, co‑CEO of Kraken, is an ardent proponent of tokenized equities. He predicts that tokenized equities will eventually surpass stablecoins in market size because they provide real economic rights and global accessibility. Sethi envisions a world where anyone with an internet connection can buy a fraction of any stock 24/7, without geographic restrictions. He argues that tokenized stocks shift power back to individuals by removing barriers imposed by geography or institutional gatekeepers; for the first time, people around the world can own and use a share of a stock like money.

5.2 Kraken’s xStocks and Partnerships

In 2024 Kraken launched xStocks, a platform for trading tokenized U.S. equities on Solana. Sethi explained that the goal is to meet people where they are—by embedding tokenized stock trading into widely used apps. When Kraken integrated xStocks into the Telegram Wallet, Sethi said the integration aimed to “give hundreds of millions of users access to tokenized equities inside familiar apps”. He stressed that this is not just about novelty; it represents a paradigm shift toward borderless markets that operate 24/7.

Kraken also acquired the futures platform NinjaTrader and launched an Ethereum Layer 2 network (Ink), signaling its intent to expand beyond crypto into a full‑stack financial services platform. Partnerships with Apollo Global and Securitize allow Kraken to work on tokenizing private assets and corporate shares.

5.3 Regulatory Engagement and Public Listing

Sethi believes that a borderless, always‑on trading platform will require regulatory cooperation. In a Reuters interview he said that expanding into equities is a natural step and paves the way for asset tokenization; the future of trading will be borderless, always on, and built on crypto rails. Kraken engages with regulators globally to ensure its tokenized products comply with securities laws. Sethi has also said Kraken might consider a public listing in the future if it supports their mission.

6. Comparative Analysis and Emerging Themes

6.1 Tokenization as the Next Phase of Market Infrastructure

All panelists agree that tokenization is a fundamental infrastructure shift. Mónica describes stablecoins as the catalyst that enables tokenizing every other asset class. Lo Bessette sees tokenization as a way to improve settlement efficiency and open access. Aggarwal predicts that all assets will eventually come on‑chain and that Coinbase will provide the infrastructure. Thorn emphasizes that tokenized equities create faster, more inclusive capital markets, while Sethi foresees tokenized equities surpassing stablecoins and democratizing ownership.

6.2 Necessity of Regulatory Clarity

A recurring theme is the need for clear, consistent regulation. Mónica and Thorn insist that tokenized assets must comply with securities laws and that stablecoins and deposit tokens require strong regulation. Lo Bessette notes that Fidelity works closely with regulators, and its tokenized money‑market fund is designed to fit within existing regulatory frameworks. Aggarwal and Sethi highlight engagement with policymakers to ensure that their on‑chain products meet compliance requirements. Without regulatory clarity, tokenization risks replicating the fragmentation and opacity that blockchain seeks to solve.

6.3 Integration of Stablecoins and Tokenized Assets

Stablecoins and tokenized treasuries are seen as foundational. Aggarwal views stablecoins as the native rail for AI and global commerce. Mónica sees well‑regulated stablecoins as the “starting gun” for tokenizing other assets. Lo Bessette’s tokenized money‑market fund and Thorn’s caution about deposit tokens highlight different approaches to tokenizing cash equivalents. As stablecoins become widely adopted, they will likely be used for settling trades of tokenized securities and RWAs.

6.4 Democratization and Global Accessibility

Tokenization promises to democratize access to capital markets. Sethi’s enthusiasm for giving “hundreds of millions of users” access to tokenized equities through familiar apps captures this vision. Aggarwal sees tokenization enabling billions of people and AI agents to participate in digital commerce. Mónica’s view of 24/7 markets accessible globally aligns with these predictions. All emphasize that tokenization will remove barriers and bring inclusion to financial services.

6.5 Cautious Optimism and Challenges

While optimistic, the panelists also recognize challenges. Thorn warns against unauthorized pre‑IPO tokenization and stresses that deposit tokens might replicate “wildcat banking” if each bank issues its own. Lo Bessette and Mónica call for careful regulatory design. Aggarwal and Sethi highlight infrastructure demands such as compliance, custody and user experience. Balancing innovation with investor protection will be key to realizing the full potential of tokenized capital markets.

Conclusion

The visions expressed at TOKEN2049 and in subsequent interviews illustrate a shared belief that tokenization will redefine capital markets. Leaders from Haun Ventures, Fidelity, Coinbase, Galaxy and Kraken see tokenization as an inevitable evolution of financial infrastructure, driven by stablecoins, tokenized treasuries and tokenized equities. They anticipate that on‑chain markets will operate 24/7, enable global participation, reduce settlement friction and democratize access. However, these benefits depend on robust regulation, compliance and infrastructure. As regulators and industry participants collaborate, tokenization could unlock new forms of capital formation, democratize ownership and usher in a more inclusive financial system.