Author: Hu Tao, ChainCatcher

1. The untenable liquidity dispute

In the past few months, tokenized U.S. stocks have become one of the most talked about topics in the crypto industry at an unprecedented rate.

From the continuous emergence of platforms that support on-chain stock trading, to more and more exchanges and DeFi protocols starting to deploy related businesses, to the gradual clarity of the regulatory environment, the tokenization of US stocks has evolved from a fringe concept to the most explosive direction in the entire RWA (real world assets) track.

However, while the popularity is heating up rapidly, there is also a concern in the market: when high-quality stock assets such as Nvidia, Tesla, Apple, and Coinbase are moved to the chain, will the funds originally belonging to the crypto market be sucked away by these traditional assets? Will Bitcoin, Ethereum and even altcoins face greater liquidity pressure as a result?

This concern is not unfounded. For many ordinary investors, when they can also trade through on-chain accounts, on one side are crypto assets that are highly volatile and lack cash flow support, and on the other side are the stocks of the world's leading technology companies with real businesses, profits and valuation systems. The latter seems to be more likely to be recognized by traditional funds.

But if the time dimension is extended, people may find that this wave of tokenization of US stocks is not a direct threat to the encryption industry, but is more likely to be the most important expansion of the encryption industry since DeFi Summer - of course, it may also be the most important in the history of encryption.

In essence, U.S. stock assets are assets of different nature from most crypto-native assets. Historical data and on-chain capital flows show that when on-chain asset categories expand, there may be friction in short-term capital rebalancing, but in the medium to long term, capital with different risk preferences will complement rather than substitute on the chain.

More importantly, the prosperity of tokenized U.S. stocks is highly dependent on the settlement layer of stable coins and native public chains. Without USDC and USDT, there would be no payment tools for buying stock tokens; without Ethereum, Solana or Base, there would be no carrier for issuance, trading and clearing; without DeFi protocols, holders of stock tokens would not be able to release their capital efficiency.

Investors may enter the on-chain world to purchase stock tokens, but a considerable number of them will gradually come into contact with stablecoin payments, on-chain lending, income products, and even crypto-native assets.

"Once stablecoins, U.S. stock tokenization, etc. are put on the chain, they will not simply lie on the chain. They must become liquid, and the composability of encryption will be fully utilized. Once there is a good narrative and a good project, not only funds from the encryption circle will come in, but also funds from outside the circle will flow in. This is just a competition on the same field." said Lan Hu, a well-known encryption researcher.

According to DeFillama, the total TVL of tokenized stocks and ETFs currently exceeds $1.7 billion, making it the fastest-growing DeFi vertical.

Recently, exchanges such as Binance, Bitget, and Gate have successively announced the launch of spot U.S. stock trading functions, and support for tokenization and inclusion on the chain. This means that the size of the U.S. stock market will continue to expand rapidly, and its market demand has been fully verified.

What is even more iconic is that more and more traditional financial giants are also accelerating their deployment. In mid-May, the U.S. Securities Depository Trust and Clearing Corporation and the global securities clearing giant DTCC announced that they would integrate Chainlink to build the data and orchestration layer of their tokenized collateral platform, and then announced at the end of the month that they would launch DTC custody asset tokenization services on the Stellar network. These developments have also directly stimulated the rise in related token prices, and have directly benefited the adoption rate of existing infrastructure service providers in the crypto market.

Such developments send an extremely clear signal: the traditional financial world not only does not regard blockchain as a "competitor", but is actively embracing public chains as its infrastructure for asset clearing and settlement. DTCC’s choice is not an isolated case—JPMorgan Chase’s Onyx platform, Citi’s tokenization service, BlackRock’s BUIDL fund, and the respective approved tokenized stock plans of Nasdaq and the New York Stock Exchange are all pointing in the same direction: the underlying architecture of global finance is undergoing a system-level “on-chain” migration.

The value of this to the crypto industry is twofold. On the one hand, it provides the strongest endorsement for the regulatory legitimacy and market credibility of tokenized assets - when an institution like DTCC chooses a public chain, it is equivalent to declaring to tens of thousands of financial institutions around the world that "the assets on the chain are trustworthy." On the other hand, the entry of these institutions has directly driven the adoption of existing encryption infrastructure service providers. Chainlink’s data oracles, Stellar’s ​​asset issuance standards, and Ethereum’s smart contract capabilities have all received actual demand verification in this process.

2. Promote the system-level upgrade of the global financial infrastructure

From a more macro perspective, the biggest significance of the U.S. stock tokenization craze to the currency circle may not be how much "new money" it can bring, but that it has proved the actual value of blockchain technology to the traditional financial world in an irrefutable way for the first time.

Over the past decade or so, the encryption industry has been trying to prove the importance of blockchain to the outside world, but many narratives have remained at the level of technical vision. The tokenization of US stocks is different. It directly corresponds to the core needs of the global capital market - more efficient issuance, lower-cost circulation, more transparent settlement and wider global accessibility. When Wall Street began to actively embrace these capabilities, blockchain finally ceased to be just the story of the encryption industry itself, and began to become an infrastructure upgrade that the entire financial industry participated in.

Today, tokenization is moving from an early fringe experiment driven by DeFi projects to a mainstream financial track dominated by large asset managers, custodians, exchanges and financial market infrastructure providers. The change of the leader itself means that this "on-chain movement" is not a "downgrade" of the financial game, but a system-level upgrade of the underlying global financial architecture.

When global investors become accustomed to holding stocks, bonds, funds and even various real assets through the blockchain, what the encryption industry will gain will not just be a hot hype, but a fundamental expansion of value-carrying capacity.

"Every time the market matures, it is essentially a process of funds flowing from inefficient assets to high-efficiency assets. When garbage coins are gradually eliminated, protocols, infrastructure and financial products that can truly create value will have the opportunity to obtain more reasonable valuations. Tokenization of US stocks may not be the end of the crypto market, but it is likely to be an important turning point for the crypto market from "speculative market" to "capital market." said crypto trader @Win_Win_Bro.

Therefore, rather than viewing the tokenization of U.S. stocks as a threat to the crypto industry, it is better to view it as one of the most important milestones in the process of blockchain moving into the mainstream financial system.

The moment the $75 trillion U.S. stock market is connected to crypto infrastructure—even if it only achieves 2% penetration—that’s $1.5 trillion in new on-chain value. By then, there will no longer be any debate about whether tokenizing U.S. stocks takes away liquidity or injects unprecedented value anchoring into the blockchain.