As tokenized securities trading moves on chain, a foundational question is emerging: what should these transactions settle in?
Traditional securities settlement runs through well established infrastructure. In the US, DTCC subsidiaries handle clearing, netting and settlement, ultimately anchored by central bank money. But tokenization changes the picture. Consider the DTC tokenization pilot: once a security is tokenized and held on chain, subsequent transfers between parties happen on the distributed ledger, outside DTC’s settlement rails. The same logic applies to tokenized structured products like Kraken’s xStocks or transactions on NYSE’s planned tokenized trading venue.
For these on chain transactions, participants need a settlement asset. Today the default is stablecoins. But are they optimal for institutional scale flows?
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