By Chris Perry, President, Broadridge Financial Solutions

Tokenization is emerging as a practical way to improve how assets are issued, transferred, and settled across many industries, including capital markets, where interest is growing in how tokenized shares could operate on blockchain or other distributed ledger technology.

That’s not surprising. The benefits of tokenization are clear: greater transparency into transactions and ownership, more programmable assets, better portability across platforms, and more efficient market operations.

Tokenization is already gaining traction in funds, private markets, bonds, collateral management, and repo. Broadridge’s own Distributed Ledger Repo platform, for example, now processes more than $365 billion in tokenized repo transactions every day. That momentum is also showing up in how firms are planning for the future. Broadridge’s 2026 Digital Transformation & Next-Gen Technology Study found that more than half of the nearly 1,000 financial services firms we surveyed are making meaningful investments in tokenization and expect blockchain to materially transform settlement and capital markets.

Many market observers see stocks as a natural next step for tokenization. The exchanges are already moving in that direction. Nasdaq and the New York Stock Exchange are currently working on efforts to support tokenized equities.

Going forward even further, some see an opportunity to rethink the market’s underlying architecture altogether, replacing parts of the traditional structure with a natively tokenized one. They argue that today’s equity markets still rely on layers of back-office infrastructure that can slow ownership transfer and add cost, friction, and complexity, and they see native tokenization of shares — issuing actual equity directly on a shared digital ledger — eventually supporting faster settlement, more continuous trading, and fractional ownership.

What it will take to scale

Getting to the point where tokenized stocks can operate at scale within a durable market structure will take time and sustained effort.

The U.S. equity market does not operate in a vacuum. It runs at enormous scale — an average of more than $1 trillion in daily trading volume — on infrastructure built for resilience, transparency, netting efficiency, and asset servicing, all supported by a deeply developed regulatory framework.

Creating a new and better market architecture will have to meet that bar, not simply improve one part of the transaction lifecycle.

It’s important to keep in mind that tokenization does not change the underlying nature of the asset. A tokenized security is still a security. It carries the same legal rights, investor protections, disclosure obligations, and servicing requirements as any traditional instrument.

As tokenized equities scale, providers will need to meet the same governance and disclosure standards that apply in traditional markets. Issuers, meanwhile, may face new layers of complexity as they manage registered shares, beneficial shares, and potentially tokenized shares structured in different ways and issued across different blockchain networks.

Yes, faster execution and faster settlement are good improvements. Functioning capital markets also depend on a full ecosystem of capabilities that make markets trustworthy and durable: clearing, custody, reconciliation, proxy voting, corporate actions processing, regulatory reporting, and more. That infrastructure also plays a critical role in reducing the risk of fraud through layers of controls, recordkeeping, transparency, and regulatory oversight.

Much of today’s infrastructure operates so effectively that it is easy to forget how much work it is actually doing. Established post-trade infrastructure, for example, delivers enormous netting benefits. The Depository Trust & Clearing Corp. says its National Securities Clearing Corp. clearing subsidiary reduces the value of payments that need to change hands in U.S. equities and corporate and municipal bonds each day by an average of more than 98%. Markets also rely on systems like the Consolidated Audit Trail to give regulators visibility into orders and trades across the equities and options markets. And asset servicing remains a massive operational undertaking, covering everything from dividend payments and tax reporting to class actions and proxy services.

Tokenized securities can work, but to do so at scale will require solving a series of practical design and infrastructure questions. Markets need answers on how tokenized securities are legally structured; how dividends, taxes, fees, and proxy voting are handled; how lifecycle events and corporate actions — especially voluntary actions — are processed; how stablecoins or tokenized cash fit into settlement; and how tokenized assets interoperate with traditional market rails. The same framework will also need to support issuance, servicing, and unitization across more complex instruments, including synthetics and derivatives, while continuing to meet regulatory requirements and customer protection standards.

The practical path forward

The good news is that the U.S. financial system has adapted successfully to major market innovations before — from as far back as the invention of Treasury STRIPS and mortgage-backed securities, to single-stock futures, asset-backed securities and ETFs, to structured notes, private credit, and wholly synthetic securities.

The future is fast approaching a hybrid model in which tokenized assets are integrated into the existing market framework and operate alongside traditional infrastructure. In that model, some functions may move onchain — such as issuance, transfer, or aspects of settlement — while core market functions like asset servicing, compliance, regulatory reporting, and connectivity to cash and clearing systems continue to rely on established rails and institutions.

We are witnessing the market evolution. While many market participants rightly worry about the cost and complexity of maintaining hybrid infrastructure for limited volumes now, the wait will be worth it.

Under a hybrid model, tokenized assets may trade more frequently and with less friction, creating real capital and collateral efficiencies while remaining anchored in the legal, operational, and regulatory foundations that make markets resilient and trustworthy.

The goal is not to build a separate market for tokenized assets, but to integrate tokenization into the broader financial system in a way that preserves interoperability, control, and scale.

That’s the practical path forward.

Tokenization can create real efficiencies and enable entirely new product models. Its promise will not be realized simply by putting assets onchain; it will be realized by building tokenized markets that serve issuers and market participants as effectively and reliably tomorrow as traditional markets do today.