Tokenization

Tokenization of assets is going to transform global finance, but by dragging their heels on establishing clear rules of the road, U.S. regulators could be pushing the development of key infrastructure overseas.

Tokenization is being adopted from within the system, not alongside it. It's improving how markets operate by making settlements faster, increasing their mobility, boosting transparency and expanding access.

Federal Reserve Gov. Lisa Cook said Friday that she believes tokenization could improve efficiency across the financial system, including faster settlement times and more effective recordkeeping. But those advantages will take place within traditional finance rather than supplanting it, she said.

The president's son has seemingly cut ties with the digital asset fintech ALT5 Sigma, whose shares lost 90% of their value after purchasing the tokens.

While stablecoins aren't widely used for payments, banks still have a role to play in leading the market.

The move is the first cog in a wider plan to make tokenized deposits more interoperable across borders and, eventually, among the bank's clients.

The tokenization platform provider, which has a nonbinding agreement with NYSE and is aiming for a public debut, promoted former SEC Trading and Markets Director Brett Redfearn to the role.

On-chain infrastructure is making idle balances obsolete. The OCC needs to act before banks lose the ability to compete in a market where consumers no longer tolerate below-market-rate returns.

Bank of Montreal has introduced a tokenized cash and deposit platform, while the London-based Monument is partnering with the Midnight Foundation's distributed ledger. Also, Starling Bank's AI play, stablecoins gain ground in APAC and Africa and more in the American Banker global payments and fintech roundup.

The investment firm is growing its digital asset portfolio in a "tokenization race" by being the external asset manager for Superstate's flagship on-chain fund.

Financial institutions that delay or fail to take this leap risk losing customers and revenue, said speakers at the inaugural On-Chain Executive Summit.

The Oklahoma community bank partnered with two digital asset companies to create a cross-border form of tokenized U.S. dollar deposits.

Noelle Acheson argues that banks' focus on deposit tokens rather than stablecoins is a clear example of the "innovator's dilemma" at work: few economic incentives to embrace the innovation happening at the periphery.

Nasdaq announced its partnership with the crypto exchange as part of an initiative for 24/7 trading that is pending regulatory approval from the SEC.

Stripe has expanded its Shared Payment Tokens, a foundational building block to protect agentic commerce, to work with Visa and Mastercard's tokens. It's also added Affirm and Klarna.

The investment broker announced a real-time trading and settlement option for its tokenized money market fund through USDC stablecoins and the ethereum ledger.

As tokenization increasingly brings instant settlement to transactions, the liquidity buffer that batch settlement has provided for decades is going to shrink and then disappear. Banks will need to rethink liquidity management.

At a time when banks have tokenization, stablecoin and blockchain projects in the works, senior leaders will exchange ideas at a New York conference.