Take a tokenized stock. What can it actually do? If the honest answer is buy, sell, transfer, the market around it is incomplete — a spot market, not a capital market. A traditional security participates in a much wider set of financial activities: it can be posted as repo collateral, pledged for margin, lent out through securities lending, hedged with derivatives, transformed through structured products, and financed by a dealer's balance sheet[7]. Those activities, taken together, are most of what makes a security useful to an institution that holds it.
Tokenization ≠ financialization. Tokenization is the substrate. Financing is the next layer.
This is not a criticism of tokenization — quite the opposite. Making an asset programmable is a genuine and necessary precondition. But it is a precondition, not a conclusion. The financing architecture that traditional securities markets built up over a century of practice, repo, margin, securities lending, structured credit, prime brokerage, does not arrive automatically the moment an asset becomes an ERC-20 token. Someone has to build it.
Forwarded fromNaut's Laboratory
September 8, 2026 4
