Tokenization Will Eat Capital Markets. Here's How. | Xin Song

Tokenization will reshape capital markets—enabling 24/7 access, faster settlement, and new yield paths; GSR explains practical models, risks, and go-to-market strategies.

Key Takeaways

Tokenization accelerates 24/7 trading, faster settlement and greater capital efficiency, expanding access to underbanked, offshore, retail and institutional investors while reshaping market infrastructure.
Tokenized money-market funds and stablecoins can lower counterparty risk, enable bank deposits, and use tokenized treasuries for yield as issuers gain collateral acceptance from banks and exchanges.
Equity tokenization coexists across models: wrapped tokens (~70% issuance) prioritize access and DeFi composability, issuer-led/DTC models prioritize capital efficiency; SPVs enable wrapped access without issuer approval.
GSR is building an end-to-end stack—market making, OTC liquidity, origination, advisory and asset management—using acquisitions and a regulated Cayman manager to distribute tokenized funds globally.
Adoption depends on distribution and balance-sheet unlocks: centralized exchanges, DEXs, crypto foundations, fintechs, and structured products/prime-brokerage solutions to free margin and enable yields.
Major constraints include smart-contract and custody risk, adverse-selection from distressed issuers, regulatory approvals, and bank resistance to passing yields—requiring compliance-first, phased institutional approaches.

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