Global stock tokenization is advancing, and the next major step could come from DTCC’s tokenization pilot on Canton Network, according to Grayscale Research Head Zach Pandl. He said tokenized equities could give users several benefits, including 24/7 trading, while allowing tokenized stocks and other assets to move through blockchain infrastructure inside a regulated financial system.
Grayscale breaks the market into three phases
Grayscale said stock tokenization is likely to develop in three stages, with each one creating value for a different type of blockchain infrastructure.
The first is the third-party wrapper model. Under that structure, the issuer holds the underlying shares through a special purpose vehicle, or SPV, and the tokenized stock represents a claim on the SPV. Grayscale said more than 70% of tokenized stocks by market capitalization currently use this model.
These wrapped tokenized stocks do not represent true equity ownership, but they can be used in DeFi and may appeal to retail investors. Grayscale said such assets are now trading on Ethereum, Solana, and BNB Chain.
DTCC pilot fits the entitlement model
The second stage is the entitlement model, which Grayscale used to describe DTCC’s pilot. Instead of creating a new version of a security, DTCC would place existing eligible securities onchain through its regulated post-trade infrastructure. Canton Network will be the first blockchain network used in that pilot.
As noted in the source material, DTCC is a core U.S. post-trade market infrastructure provider responsible for functions such as clearing, settlement, and custody. Canton Network is designed for institutional financial assets, with a focus on privacy, compliance, and asset transfers between financial institutions.
Issuer-led issuance has the biggest long-term upside in Grayscale’s view
The third stage is an issuer-led model, where companies issue securities natively onchain. Grayscale said Securitize became the first listed company to tokenize its own common stock when it listed on the New York Stock Exchange last week.
Grayscale called this model the one with the greatest long-term potential, though it said clearer regulation is still needed. In its view, issuer-led tokenization would favor open blockchain architectures such as Ethereum and Solana, as well as hybrid networks such as Avalanche.
Five networks named as likely beneficiaries
Grayscale said the three tokenization models are likely to coexist for many years. Its core view is that tokenized equities will not follow a single path, and that the networks most likely to benefit from the sector’s growth are Ethereum, Solana, BNB Chain, Avalanche, and Canton Network.
The report also said third-party platforms still dominate the tokenized stock market today, while Ethereum, Solana, and BNB Chain account for most of the onchain asset share.