Tokenized Securities Need Open Markets, Not Gatekeepers
The push to tokenize financial securities raises urgent questions about who controls access and whether incumbents will capture the new rails.
The tokenization of traditional financial securities — stocks, bonds, fund shares — has moved from theoretical curiosity to active industry project, with major banks, asset managers, and blockchain startups all staking claims. But as the infrastructure takes shape, a critical governance question is emerging: will these new digital markets be genuinely open, or will established intermediaries simply recreate the same walled gardens they already control in legacy finance?
The concern is not abstract. Incumbent institutions have both the capital and the regulatory relationships to position themselves as essential gatekeepers on tokenized platforms. If they succeed, the efficiency gains that tokenization promises — faster settlement, broader investor access, lower costs — could accrue primarily to those gatekeepers rather than to the broader market. Competition, in that scenario, would be an afterthought rather than a design principle.
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The argument for prioritizing competition is structural. Tokenized securities derive much of their value from programmability and interoperability: the ability to move assets across platforms, compose them with other financial instruments, and settle transactions without unnecessary friction. Gatekeeping intermediaries undermine precisely these properties. A tokenized bond that can only be held in one institution's digital wallet is, in practice, not meaningfully different from a traditional bond.
Regulators will play a decisive role. How authorities define custody, transfer agency, and broker-dealer obligations in a tokenized context will either open space for new entrants or cement the advantages of existing players. The design choices made now — about permissioned versus permissionless infrastructure, about who can issue and who can hold — will be difficult to reverse once network effects take hold. The window for getting the architecture right is open, but it will not stay open indefinitely.
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