Digital Assets Thoughts of the Week: Institutions, Tokenization, & 24/7 Trading

Institutions and tokenization

“Tokenization is reaching a stage where financial institutions are beginning to use it for activities that already form part of capital markets. Banks are exploring how tokenized securities can be used for financing, custody, and settlement, while issuers are paying closer attention to how their shares are represented and traded on digital platforms.

“BNY and Citadel Securities have completed a transaction using a tokenized US Treasury as collateral for overnight financing, demonstrating how digital securities can move from settlement into other financial activities within minutes.

“Meanwhile, Deutsche Bank is preparing to launch digital asset custody services, with plans to expand into tokenized deposits and securities issuance. In the US, nine publicly listed companies have also objected to tokenized versions of their shares being traded on a proposed platform.

“I think the BNY transaction is particularly important because it shows what becomes possible when securities can be settled and used as collateral more quickly. Deutsche Bank’s plans also suggest that banks see opportunities to offer a wider range of digital asset services to their clients. As these services develop, I expect greater attention to how they can be connected across institutions and made available to more issuers and investors.

“BNY and Citadel Securities have completed a triparty repo transaction using a tokenized two-year US Treasury, marking the first use of tokenized assets on a major triparty repo platform.
The security was recorded on BNY’s private digital ledger and settled within minutes instead of the standard T+1 cycle. Citadel Securities then used the Treasury as collateral to secure overnight financing.

“I think this is an important development because it demonstrates how tokenized securities can be used beyond their initial issuance and transfer. A Treasury that can settle within minutes and become available for financing sooner could give institutions greater flexibility in managing collateral and accessing liquidity.

“This could have wider implications for banks and financial institutions holding large portfolios of securities. If these assets can move more efficiently between trading, settlement and financing activities, institutions may be able to reduce the amount of capital tied up during transaction processing.

“Over the next year, I expect more institutions to explore similar arrangements for government bonds and other liquid securities. The next step will be making these processes work across different custodians and financial platforms, allowing tokenized assets to be used more widely rather than within individual systems.

“Deutsche Bank is preparing to launch its digital asset custody service in Germany, with plans to expand into Asia in 2027. The bank intends to support Bitcoin and Ether custody initially, followed by stablecoin transactions, tokenized deposits and blockchain-based securities issuance.

“Deutsche Bank’s plans to move beyond custody into issuance and payments are particularly interesting. Banks are beginning to look at how they can support tokenized assets across different stages of their lifecycle, which could make it easier for institutional clients to issue, hold and transact in digital securities through existing banking relationships.

“JPMorgan has already taken steps in this direction with JPM Coin, its USD-denominated deposit token made available to institutional clients on Base, an Ethereum Layer 2 network, in November, 2025. This provides an example of how bank-issued digital money can support faster institutional payments and potentially more integrated settlement processes.

“It would be interesting to see more banks explore how tokenized deposits, custody and securities issuance can work together. For issuers, this could create new distribution opportunities, particularly if securities can be issued, held and settled through services connected to established banking networks.

“The next question is how quickly these services can be connected across institutions. Banks may initially develop their own systems, but institutional clients will increasingly need the ability to transact across different platforms and markets.

“Nine US-listed companies, including Broadcom, Verizon and CoreWeave, have objected to tokenized versions of their shares being traded on OKXICE, citing concerns over pricing, liquidity and shareholder rights.

“These objections raise an important question about how tokenized equity markets will develop. As securities become available across more trading venues, companies will want greater control over how their shares are represented and how investors exercise their rights.

“We could see greater issuer involvement in tokenized equity markets, particularly around authorization, ownership records and corporate actions. Platforms will also need to address how prices remain consistent when the same securities trade across traditional and blockchain-based markets.

“Over the coming months, these concerns could influence how tokenized equity platforms work with listed companies. Getting issuers comfortable with the structure could become just as important as securing regulatory approval.

“I think the developments this week give us a clearer picture of where tokenization is heading. BNY’s transaction shows how tokenized securities can be used for financing, while Deutsche Bank’s plans could make issuance and custody services accessible to more institutional clients. The objections from US companies also suggest that issuers will want a greater say in how their securities enter these markets.

“Over the next twelve months, I expect financial institutions to focus on connecting these services and making them commercially available. More banks could begin offering custody, issuance and settlement within their existing operations, creating new opportunities for tokenized assets to reach institutional investors.

“BNY’s transaction is an important example of how tokenization can improve the way securities are used in financial markets. We are beginning to see financial institutions apply this technology to settlement, financing and custody, which are activities they already manage every day. I expect the next stage to focus on making these capabilities available across more institutions and markets, so issuers and investors can use tokenized securities more easily.”

– Edwin Mata, co-founder and CEO, Brickken

“A lot of institutions focus on custody. They then go into products and what they can offer, without fully understanding that all of these security functions underneath, such as simulation, audits of all your integrations as well, and contingency plans, are what will retain the users for the long term.”

– Connor Howe, co-founder and CEO, Enso

24/7 exchanges

“What Wall Street is announcing for December, we are already doing in Europe. During ST GROUP’s IPO, the first on Lise, 60% of orders were placed outside traditional market hours.

“Round-the-clock trading is more than a technical feature: it meets real investor demand. Europe has gained a head start thanks to a pioneering regulatory framework, but that gap is narrowing fast.

“To compete with the United States, we need to build a pan-European market infrastructure that operates around the clock, removes internal borders and makes capital market financing accessible to businesses of all sizes. Lise has both the technology and the ambition to make this happen.”

– Mark Kepeneghian, CEO, Lise – Lightning Stock Exchange