TLDR
- Alpaca launches 24/7 blockchain settlement for tokenized US stocks.
- Tokenized stocks get real-time minting via Alpaca’s ITN on Solana.
- Alpaca’s ITN removes delays in tokenized stock creation and redemption.
- Institutions can now mint & burn tokenized stocks instantly with ITN.
- Alpaca bridges stock and crypto markets with instant in-kind settlement.
Alpaca has launched its Instant Tokenization Network (ITN), enabling round-the-clock in-kind stock settlement through blockchain. The Tokenization Network allows institutions to directly mint and redeem tokenized US stocks using a single API. This infrastructure aims to improve liquidity and efficiency in the expanding market for tokenized assets.
ITN Eliminates Friction in Tokenized Stock Market
Alpaca’s Tokenization Network solves a key issue in the tokenized securities ecosystem — delayed and costly liquidity provisioning. Traditional tokenized stocks often trade at a premium or discount to their underlying due to inefficient minting processes. With ITN, institutions bypass these delays by settling in-kind directly into brokerage-held stocks.
The Tokenization Network eliminates the need to liquidate assets before conversion, ensuring a 1:1 transfer between stocks and tokens. It allows tokens to be minted or burned instantly, seamlessly bridging on-chain and off-chain liquidity. Moreover, market participants gain the flexibility to operate beyond standard trading hours.
The Tokenization Network initially supports Solana as its exclusive settlement layer, with multi-chain compatibility planned for the future. It integrates with key platforms including Backed (xStocks), Ondo Finance, Dinari, and DRW. These partners can now perform instant redemptions and re-minting across stock variants through Alpaca’s infrastructure.
Institutional Use Cases Benefit from Alpaca’s ITN Infrastructure
The Tokenization Network supports a wide range of institutional use cases designed to enhance market efficiency. Trading desks can arbitrage across venues with price certainty using par-value redemption, ensuring synchronized on-chain and off-chain valuations. Derivatives desks can hedge positions without relying on illiquid crypto markets by directly accessing underlying stock liquidity.
Decentralized finance (DeFi) protocols can redeem collateral in-kind during liquidations, avoiding volatile token sales on thin crypto order books. They reduce slippage and improve transparency in risk management. The Tokenization Network also facilitates seamless movement between tokenized stock types, enabling builders to avoid fragmented liquidity pools.
Alpaca’s infrastructure arrives at a time when global institutions are seeking tools to tokenize real-world assets (RWAs) more efficiently. The Tokenization Network is designed to operate within regulatory boundaries, supporting US-regulated institutions and non-US affiliates through its journaling and delivery model. This model creates a compliant bridge between traditional finance and decentralized applications.
Alpaca Positions Tokenized Assets for Scalable Growth
The Tokenization Network enters a market expected to grow significantly, with projections pointing toward a $10 trillion market cap by 2030. Over $31 billion in real-world assets are already represented on-chain. Tokenized US stocks, currently valued at $700 million, are anticipated to drive the next growth wave in asset tokenization.
Alpaca’s launch follows the SEC’s recent endorsement of in-kind creation and redemption for Bitcoin and Ether ETFs. By enabling similar functionality for equities, the Tokenization Network advances regulatory-aligned tokenization of traditional securities. This aligns with growing support for 24/7 markets and asset portability across financial ecosystems.
With the Tokenization Network, Alpaca aims to standardize the on-chain representation of traditional assets. By removing settlement barriers, it ensures that liquidity flows freely between markets and asset forms. This approach provides the underlying rails for broader adoption of tokenized finance globally.
