Tokenization: Redefining Capital Markets
Introductionâ
Tokenization refers to representing ownership of an asset on a blockchain through digital tokens. These tokens can represent financial assets (equities, bonds, moneyâmarket funds), realâworld assets (real estate, art, invoices) or even cash itself (stablecoins or deposit tokens). By moving assets onto programmable, alwaysâon blockchains, tokenization promises to reduce settlement friction, improve transparency and allow 24/7, global access to capital markets. During TOKEN2049 and subsequent discussions in 2024â2025, 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 âTokenization: Redefining Capital Marketsâ panel and related interviews: Diogo MĂłnica (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 (CoâCEO, Kraken). The report also situates their views within broader developments such as tokenized treasury funds, stablecoins, deposit tokens and tokenized equities.
1. Diogo MĂłnica â General Partner, Haun Venturesâ
1.1 Vision: Stablecoins Are the âStarting Gunâ for Tokenizationâ
Diogo MĂłnica argues that wellâregulated 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 onâchain, âyou open the door to tokenize everything else â equities, bonds, real estate, invoices, artâ. MĂłnica notes that a few technologically advanced stablecoins already facilitate nearâinstant, cheap crossâborder transfers; but regulatory clarity is needed to ensure wide adoption. He emphasizes that stablecoin regulations should be strictâmodeled on the regulatory regime for moneyâmarket fundsâto ensure consumer protection.
1.2 Tokenization Will Revive Capital Formation and Globalize Marketsâ
MĂłnica contends that tokenization could âfixâ broken capitalâformation mechanisms. Traditional IPOs are expensive and restricted to certain markets; however, issuing tokenized securities could let companies raise capital onâchain, with global access and lower costs. Transparent, alwaysâopen markets could allow investors worldwide to trade tokens representing equity or other assets regardless of geographic boundaries. For MĂłnica, the goal is not to circumvent regulation but to create new regulatory frameworks that enable onâchain capital markets. He argues that tokenized markets could boost liquidity for traditionally illiquid assets (e.g., real estate, smallâbusiness 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 onâchain markets.
1.3 Encouraging Startups and Institutional Adoptionâ
As a venture capitalist at Haun Ventures, MĂłnica encourages startups working on infrastructure for tokenized assets. He highlights the importance of compliant digital identity and custody solutions, onâchain governance and interoperable blockchains that can support large volumes. MĂłnica sees stablecoins as the first step, but he believes the next phase will be tokenized moneyâmarket funds and onâchain treasuriesâbuilding blocks for fullâscale capital markets.
2. Cynthia Lo Bessette â Head of Digital Asset Management, Fidelity Investmentsâ
2.1 Tokenization Delivers Transactional Efficiency and Accessâ
Cynthia Lo Bessette leads Fidelityâs 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 Fidelityâs planned tokenized moneyâmarket fund, Lo Bessette stated that tokenizing assets can âdrive transactional efficienciesâ and improve access and allocation of capital across markets. She noted that tokenized assets could be used as nonâcash collateral to enhance capital efficiency, and said that Fidelity wants to âbe an innovator⊠[and] leverage technology to provide better accessâ.
2.2 Fidelityâs Tokenized MoneyâMarket Fundâ
In 2024, Fidelity filed with the SEC to launch the Fidelity Treasury Digital Fund, a tokenized moneyâmarket fund on the Ethereum blockchain. The fund issues shares as ERCâ20 tokens that represent fractional interests in a pool of government treasuries. The goal is to provide 24âhour 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 onâchain collateral. By offering a tokenized version of a core moneyâmarket instrument, Fidelity wants to attract institutions exploring onâchain financing.
2.3 Regulatory Engagementâ
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 â Chief Business Officer, Coinbaseâ
3.1 Expanding Beyond Crypto Trading to OnâChain Financeâ
As Coinbaseâs first CBO, Shan Aggarwal is responsible for strategy and new business lines. He has articulated a vision where Coinbase becomes the âAWS of crypto infrastructureâ, providing custody, staking, compliance and tokenization services for institutions and developers. In an interview (translated from Forbes), Aggarwal said he sees Coinbaseâs role as supporting the onâchain economy by building the infrastructure to tokenize realâworld 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 Commerceâ
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, âstablecoins are the native payment rails for AI agentsâ. 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 onâchain. 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 Complianceâ
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 âoneâstopâshopâ infrastructure for trading, financing and onâchain operations. Importantly, Aggarwal works closely with policymakers to ensure regulation enables innovation without stifling growth.
4. Alex Thorn â Head of Research, Galaxyâ
4.1 Tokenized Equities: A First Step in a New Capital Markets Infrastructureâ
Alex Thorn leads research at Galaxy and has been instrumental in the firmâs 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 peerâtoâpeer and settle in minutes rather than days. He said that tokenized equities are âa new method of building faster, more efficient, more inclusive capital marketsâ.
4.2 Working Within Existing Regulation and with the SECâ
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 KYCâapproved wallets, and redemptions occur via a regulated broker. Thorn said Galaxy wants to âwork within existing rulesâ and will collaborate with the SEC to develop frameworks for onâchain 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 Offeringsâ
Thorn has expressed caution about other forms of tokenization. Discussing bankâissued deposit tokens, he compared the current landscape to the 1830s âwildcat bankingâ 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 preâIPO token offerings launched without issuer consent. In an interview about Jupiterâs preâIPO token of Robinhood stock, Thorn noted that many preâIPO tokens are unauthorized and âdonât offer clean share ownershipâ. For Thorn, tokenization must occur with issuer approval and regulatory compliance; unauthorized tokenization undermines investor protections and could harm public perception.
5. Arjun Sethi â CoâCEO, Krakenâ
5.1 Tokenized Equities Will Outgrow Stablecoins and Democratize Ownershipâ
Arjun Sethi, coâCEO 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 Krakenâs xStocks and Partnershipsâ
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 areâby embedding tokenized stock trading into widely used apps. When Kraken integrated xStocks into the Telegram Wallet, Sethi said the integration aimed to âgive hundreds of millions of users access to tokenized equities inside familiar appsâ. 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 fullâstack 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 Listingâ
Sethi believes that a borderless, alwaysâon 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 Themesâ
6.1 Tokenization as the Next Phase of Market Infrastructureâ
All panelists agree that tokenization is a fundamental infrastructure shift. MĂłnica 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 onâchain 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 Clarityâ
A recurring theme is the need for clear, consistent regulation. MĂłnica 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 moneyâmarket fund is designed to fit within existing regulatory frameworks. Aggarwal and Sethi highlight engagement with policymakers to ensure that their onâchain 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 Assetsâ
Stablecoins and tokenized treasuries are seen as foundational. Aggarwal views stablecoins as the native rail for AI and global commerce. MĂłnica sees wellâregulated stablecoins as the âstarting gunâ for tokenizing other assets. Lo Bessetteâs tokenized moneyâmarket fund and Thornâs 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 Accessibilityâ
Tokenization promises to democratize access to capital markets. Sethiâs enthusiasm for giving âhundreds of millions of usersâ 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. MĂłnicaâs 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 Challengesâ
While optimistic, the panelists also recognize challenges. Thorn warns against unauthorized preâIPO tokenization and stresses that deposit tokens might replicate âwildcat bankingâ if each bank issues its own. Lo Bessette and MĂłnica 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.
Conclusionâ
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 onâchain 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.