Author: Payment 201
Speaker: Pet Berisha (Co-founder of Tokenized)
Guests: Rob Hadick (GP of Dragonfly), Robert Mitchnick (Head of Digital Assets at BlackRock), Noah Levine (Partner at Andreessen Horowitz)
Timeline:
00:00 Introduction
02:17 Tokenization is essentially an "access" story, allowing more investors to access asset classes that were previously difficult to access.
05:51 Tokenized equity can be broadly categorized into three structural types.
08:41 Tokenized assets under the whitelist mechanism have certain restrictions on their transferability.
11:21 The New York Stock Exchange is partnering with Securitize to explore a 24/7 trading model.
15:00 Stablecoins are evolving into a new generation of financial infrastructure.
18:58 Regional banks in the United States are building a tokenized deposit network.
24:21 Stablecoins and tokenized deposits serve different types of user groups.
25:42 The demand for privacy in the on-chain capital market is growing significantly.
31:06 The future market structure will reduce intermediaries and become more streamlined.
Stablecoins are evolving from "payment tools" into "account-layer infrastructure." Users are no longer just using them for transfers, but are directly holding balances, which naturally extends to investment, income management, and asset allocation. For financial products, stablecoin wallets will gradually replace traditional accounts as the entry point.
The greatest value of tokenization is not efficiency improvement, but expanding investment access. It allows users who were previously only involved in the crypto market to access a wider range of traditional assets, while also allowing more global investors to enter a unified market. Essentially, it expands the demand side rather than optimizes the supply side.
Most " tokenized stocks " currently on the market are still in a transitional form, essentially derivatives packaged rather than real assets on the blockchain. Issues such as inconsistent trading times, inability to redeem in real time, and unclear asset ownership indicate that the true on-chain capital market infrastructure is not yet mature.
The truly valuable model for the future is "native on-chain issuance," rather than mapping off-chain assets onto the chain. Only when assets are directly generated, traded, and liquidated on-chain will new capabilities such as staking, portfolio construction, and governance emerge, marking the starting point for structural change.
Whitelists and compliance restrictions are the core bottlenecks to liquidity in current tokenized assets. True liquidity and DeFi composability cannot be achieved as long as assets must be transferred between restricted addresses. The industry is seeking solutions that satisfy regulations without sacrificing liquidity.
24/7 trading isn't the core need; the real need comes from "asset utilization efficiency." Users holding stablecoins don't just want to trade anytime; they want these funds to seamlessly participate in investment, lending, and yield-generating scenarios. This is the key driver of tokenization growth.
Stablecoins and tokenized deposits will not substitute for each other, but rather serve different scenarios. Stablecoins are more geared towards cross-border, crypto markets, and dollar-denominated needs; tokenized deposits are more geared towards internal fund flows and efficiency optimization within the banking system. In the future, a structure will emerge where multiple forms of funds coexist.
The core obstacle for banks pushing for tokenization is not technology, but regulatory uncertainty. Issues such as AML , compliance frameworks, and capital requirements remain unclear, forcing banks to proceed cautiously, even though they recognize it as a necessary transformation.
Privacy is becoming a critical infrastructure requirement for on-chain capital markets. While it can be circumvented in payment scenarios through methods such as netting , it cannot be replaced in scenarios like collateralization, clearing, and trading. Therefore, technologies like ZK will be prioritized for adoption in capital markets rather than payment sectors.
In the long run, the financial market structure will become significantly flatter. Current transactions involve numerous intermediaries (brokerages, exchanges, clearinghouses, custodians, etc.), while tokenization can compress these intermediaries. The result is lower costs for investors, expanded reach for asset management institutions, and the opportunity for crypto infrastructure to enter the mainstream financial system.
Pet Berisha:
Welcome to Tokenized, a show focused on stablecoins and institutional adoption of tokenized real-world assets. This time, we're recording live from the Digital Asset Summit in New York. That last segment was pretty good. Hi everyone, I'm Pet Berisha, filling in for Simon this week, but at least our accents are similar. Next to me is Rob Hadick, GP of Dragonfly, a consistently entertaining guest who may have tied the show's all-time appearance record. How are you?
Rob Hadick:
I'm fine, and it's obvious I'm not as fluent as you, because I didn't deliver my entire opening remarks last time.
Pet Berisha:
Well, it just comes down to practice more.
Rob Hadick:
Yes, it's all about practice. Okay, I'll have to do it a few more times.
Pet Berisha:
We also have a first-time guest, Robert Mitchnick, Head of Digital Assets at BlackRock. Welcome to the show.
Robert Mitchnick:
Thank you for the invitation.
Pet Berisha:
Wow, there's applause! Look, Rob didn't get any earlier. I don't know why. And lastly, equally important, over there in that coat, trying to mimic Cuy Sheffield's style: Noah Levine, a partner at Andreessen Horowitz and a member of the so-called "Visa crypto mafia." How about you?
Noah Levine:
Great, I'm very excited to be here.
Pet Berisha:
This is my second time on the show. Next, I'll be doing a segment that most people will skip, and I need to remind everyone: all the opinions expressed by our guests today are their personal views and do not necessarily represent the position of their respective companies. Nothing we say should be considered tax, financial, investment, or legal advice; please do your own research. Also, I'd like to thank our sponsors Visa and Mesh , and thank Mentox Global for helping us organize this event.
This episode is sponsored by Visa, a leader in digital payments. Visa's tokenized asset platform, VTAP, uses smart contracts and cryptography to help banks bring fiat currency onto the blockchain. Whether issuing stablecoins, deposit tokens, or other forms, VTAP enables financial institutions to issue fiat-backed tokens, improving financial efficiency and enabling programmable finance.
Pet Berisha:
This episode is also sponsored by Stripe. Stablecoins are becoming a fundamental building block of borderless financial services, allowing funds to flow globally like data. Through Stripe, you can reach new user groups using stablecoins and crypto technology, reduce cross-border fees, and shorten settlement times from days to minutes.
Most importantly, it works just like other Stripe products, directly through the Stripe console via API. This means you don't need to worry about which specific blockchain or wallet you're using. From Shopify to other global companies, everyone is using Stripe's complete crypto solution to expand their markets and reach more users.
Pet Berisha:
This episode is also sponsored by M0. Stablecoins are becoming a global financial infrastructure, and this infrastructure needs to mature. If you are a brand, you should have your own stablecoin, and it should match the flow of funds in your product. If you are an issuer, you want to be the stablecoin partner for the most valuable brands. M0 is currently the only platform that allows issuers and brands to co-build digital currency products.
Pet Berisha:
Let's move on to the first topic. A news item from various sources states that Larry Fink suggests tokenization could make investing as simple as making a mobile payment. In his annual letter, he says: "Half the world's population uses digital wallets on their phones. Imagine if this digital wallet could also invest in a basket of companies as easily as sending a payment."
Tokenization can accelerate this future by upgrading the underlying structure of the financial system, making investments easier to issue, trade, and access. Robert, let me ask you something first. The reactions to this statement are quite interesting; could you elaborate?
Robert Mitchnick:
Sure. I think this is actually consistent with some of his views over the past few months or even years, and similar to his article on The Economist last November. The core idea is: we've always treated tokenization as a story of efficiency improvement, but in many ways, it's actually more of a story of "access."
There's a group of investors who are crypto-native, or more accustomed to using digital wallets and interacting with digital assets and the DeFi ecosystem, but their allocation to traditional investments is severely under-represented, even zero. The question is, how can we expose them to a much broader range of investment opportunities, beyond the current $3 trillion crypto asset market, to the entire $400-500 trillion global asset pool? I believe this represents a huge opportunity for financial inclusion, helping people build more complete and diversified portfolios.
Pet Berisha:
Rob, would you like to elaborate a bit more on the "access" aspect? Why does tokenization not only allow crypto natives to expand their portfolios, but also improve accessibility for ordinary investors and institutions?
Rob Hadick:
Okay. I might have a slightly different perspective from Robbie, and he might say I'm wrong. From our point of view, what we're seeing now is the rapid global adoption of stablecoins, often because people want access to US dollars. For example, if their country experiences 30% or 40% annual inflation, they simply want to escape their local currency and enter the dollar system. But stablecoins have essentially become a kind of "digital oil," used to move funds between different tokenized assets. When these assets exist in a similar form to stablecoins, exchanging between different assets becomes much easier.
The problem now is that if I want to gain exposure to a certain stock in an emerging market, the regulatory approvals, infrastructure, and structures required are very complex and costly. As a result, we see many people using "workarounds," such as so-called tokenized stocks like Robinhood, which are essentially derivatives: a US brokerage buys stocks during normal trading hours and then issues a corresponding token, which cannot even be minted or redeemed during certain periods.
Therefore, many current solutions are merely transitional or regulatory arbitrage opportunities, rather than representing assets of the same "form." Once these assets are all standardized, technological and market access boundaries can be broken down, leaving only regulatory issues—and as a venture capitalist, I usually tell my firm that this issue can be considered later.
Pet Berisha:
Noah, I was going to ask you that in the next topic, but since Rob mentioned these derivative structures, could you help everyone sort out the different structures of tokenized stocks in the market right now?
Noah Levine:
Sure. I might not be as good as Rob and Robbie at explaining, but I'll try my best. It can be roughly divided into three categories. The first category is the SPV (Special Purpose Vehicle) structure. You'll see someone set up an SPV to buy a certain stock asset, then tokenize this SPV and distribute it to a group of investors.
Its value lies in being a good tool if you simply want exposure to price direction. However, the problem is, as Rob mentioned before, that if this product trades for 7 days while the underlying market is only open at specific times, a price mismatch can occur. Furthermore, as an investor, you're buying an SPV, not the underlying asset itself, which also carries risks.
The second type is "rights-based tokens," similar to what DTCC or Securitize are doing. The assets themselves are issued off-chain and then tokenized, allowing wallet users to hold and gain exposure. The advantages are 24/7 trading and a degree of DeFi composability, improving asset liquidity. Of course, there is still room for improvement.
The third type is stocks issued entirely on-chain, such as what Superstate and Figure are doing. In this case, entirely new securities are issued on-chain, and holding this asset truly means holding the underlying stock. Advantages include cross-collateralization, participation in governance voting, and more. So it's not just about moving existing assets onto the chain, but about issuing them natively on-chain in the future, which is a very exciting direction.
Noah Levine:
I'd like to ask Robbie a question in return. You've done a lot of tokenization experiments, such as tokenized money market funds, and you've also tried the Securitize model (using SPV and KYC, then mapping to the blockchain but not allowing free transfer). So, what are your thoughts on the future? Will more freely transferable assets, or even native on-chain issuance like Superstate, become part of your strategy?
Robert Mitchnick:
First, let me clarify that our product is neither an SPV nor a feeder fund, but a native new fund whose shares are issued directly in token form. However, transfers are still restricted; for example, they must be transferred between whitelisted entities, which is subject to private fund rules and anti-money laundering requirements. This is a significant issue: the existence of whitelists inevitably leads to considerable friction, impacting liquidity and DeFi usability. Therefore, the entire industry is considering how to address this problem without simply engaging in regulatory arbitrage and then later "asking for forgiveness."
Pet Berisha:
I'd like to continue exploring this question. Noah, how do you see us moving towards that more open, near-permissionless state?
Noah Levine:
This is an excellent question. I think there are two aspects. First is regulatory clarity, which is crucial, and we're only just getting started. For example, there has been considerable progress in US securities regulation in the past month. Second is infrastructure. For instance, companies like Superstate and Figure currently need to provide liquidity and trading through ATS (Alternative Trading Systems), which is feasible in the short term, but further development is needed to achieve a more institutionalized scale. So the core is continued regulatory clarity plus improved liquidity infrastructure.
Pet Berisha:
Let's move on to the second topic. An exclusive from the Wall Street Journal: The New York Stock Exchange is partnering with Securitize to develop a 24/7 tokenized securities platform. Securitize will become the first digital transfer agent to issue blockchain-native securities for businesses or ETFs. Rob, could you break this down for us?
Rob Hadick:
Let me start with that, and then I'll talk about a bigger trend. Everyone's now convinced of tokenization, and there are several reasons for this, one very important one being: we want to enable weekend and nighttime trading. There are indeed market makers trying to hedge at night, but this hedging is actually very imprecise. Especially on weekends, it's almost impossible to hedge risk effectively. If you want to manage collateral and leverage on weekends, you need on-chain infrastructure. So now everyone is trying different solutions.
For example, the New York Stock Exchange might use a separate order book, similar to a new exchange; Nasdaq might prefer to trade tokenized assets and traditional assets in the same market; and some are even trying to introduce tokenized assets into dark pools. In short, everyone is exploring different paths. This is good for the entire industry because it will bring more innovation. My personal view is that eventually all assets will be tokenized.
Pet Berisha:
Robbie, do you agree?
Robert Mitchnick:
I believe this is a highly probable event, but not inevitable. Even if the probability isn't 100%, as long as it's high enough, it's enough to warrant investing significant resources in its development. Because once it happens, it will have a huge impact on the entire financial system, value chain, and market structure, including changes in the role of intermediaries.
Pet Berisha:
Noah, many people are saying that 2025 will be the year of stablecoins and 2026 will be the year of capital markets. What do you think?
Noah Levine:
I largely agree. I recall Cuy saying last year that "every bank needs a stablecoin strategy." Now, stablecoins have gone from a "whether to do it" question to a "must do it." The real question now is: if users have money in stablecoin wallets, they don't just want to see their balance or make payments; they want to do more, like invest. I believe this is the real growth driver for tokenized assets, not just 24/7 trading itself.
Robert Mitchnick:
Moreover, I believe the application of stablecoins is just beginning. While it has already gained some traction in crypto exchage and DeFi, it has yet to truly take off in scenarios such as cross-border remittances, corporate fund management, and capital markets, so there is still a long way to go for its development.
Pet Berisha:
Let's move on to our third topic. As we mentioned in last week's program, regional banks in the US are building a tokenized deposit network called Kari Network through ZK Sync. Participants include Huntington, First Horizon, M&T Bank, KeyCorp, and Old National Bank. It's planned to launch in 2026 and run on ZK Sync's permissioned blockchain. Rob, what are your thoughts on this?
Rob Hadick:
I think the current discussion about "stablecoins versus tokenized deposits" is somewhat off-topic. Essentially, we have cash equivalents and non-cash equivalents. Regulators have already begun discussing this; for example, the Basel rules and capital requirements may be redefined, and the US government has recently stated that stablecoins can be considered similar to cash equivalents, which would be helpful for capital management. Therefore, I believe these different forms of assets will ultimately serve different purposes.
For example, so-called payment stablecoins might simply be a tool for transferring funds; tokenized deposits might be another tool; and tokenized money market funds yet another. They will increasingly resemble today's financial products, but will be more digitally native, easier to exchange, more liquid, and with reduced back-end reconciliation complexity. So from my perspective, the question of "who replaces whom" isn't actually that important.
Pet Berisha:
What about the banking alliance model? Especially for medium-sized banks, what are your thoughts?
Rob Hadick:
Historically, there have been many successful banking alliances, such as Visa, Mastercard, Early Warning (which later created Zelle), and even Synchrony. Therefore, I genuinely believe that some core infrastructure is better suited for building through alliances. It's extremely difficult for a startup to simultaneously meet the needs of so many banks. You have to do many things well at once, not just one thing. Therefore, I believe that banking alliances will play a crucial role in future capital market innovation, and may even be essential.
Robert Mitchnick:
I think your statement is a bit too broad in its assessment of success stories. Because in the blockchain and digital asset space, the historical performance of consortia has actually been rather poor—and that's being kind. This isn't to say that consortia are inherently incapable, but we need to recognize that it's extremely difficult for them to create anything truly economically valuable in this field.
Pet Berisha:
So what's your suggestion?
Robert Mitchnick:
Let's leave this problem to someone else to solve. I'm currently working in the banking system.
Pet Berisha:
Noah, you used to work at Visa, you must have talked to a lot of banks, why did they choose to do tokenized deposits?
Noah Levine:
That's a good question. I think a common misconception is that banks are conservative and unwilling to innovate, but that's not true. They all recognize the significant opportunities to leverage this infrastructure to create more competitive products. The main problem lies in regulatory ambiguity. As mentioned earlier, while there has been some policy progress, many key issues remain unclear, such as compliance and AML procedures. Therefore, banks are very cautious.
Of course, there are also some more radical ones, such as JPMorgan Chase, which launched JPM Coin a long time ago and is now making new attempts; and Citi, etc. There are indeed some alliance projects, although the success rate is not high, banks are still willing to participate because they don't want to miss the opportunity.
Robert Mitchnick:
I think there's another very important point: it's crucial to be very clear what problem tokenized deposits actually solve, or what unique value they offer compared to stablecoins. This question hasn't been well answered yet.
Rob Hadick:
From a bank's perspective, they would argue that tokenized deposits allow them to maintain control over their deposit base while continuing fractional-reserve banking operations. On the other hand, asset management firms, for example, would prefer to continue managing money market funds. Therefore, it's a game of strategy between different stakeholders.
Pet Berisha:
Noah, if it's a consortium of medium-sized banks, what do you think the chances of it succeeding in the future?
Noah Levine:
I think it's difficult for any specific project to succeed. But from a product perspective, stablecoins and tokenized deposits are completely different things, serving different users. The current market fit for stablecoins is mainly in the crypto capital market, such as fund transfers between exchanges, DeFi, and as a store of value for the US dollar outside the US. These banks primarily serve domestic clients; for example, M&T Bank wouldn't serve Argentinian users. Therefore, their use cases are more at the wholesale level, such as fund flows, back-office settlement, and internal efficiency optimization. In this scenario, such projects have the potential to succeed, but they won't become mass-market products.
Pet Berisha:
Robert, I have one last question. There's been a lot of discussion about "privacy" in the crypto industry lately, with things like ZK technology. Why is this issue only now receiving real attention?
Rob Hadick:
Actually, everyone has been working on this, but in the past, the demand wasn't as strong, or rather, the only demand mainly came from some less-than-ideal uses. For example, let's talk about stablecoin payments. If you're doing payroll or other payments, you certainly don't want everyone to see how much money each person receives. So how do we solve this in reality? We use "netting," for example, summarizing all the transactions for the day and then only making one settlement transaction on the blockchain, which inherently provides a certain degree of privacy.
However, in capital market scenarios, such as weekend trading and collateral management, the situation is completely different. You can no longer use net settlement to solve this because you need to handle risk in real time. Therefore, privacy becomes even more critical. ZK technology can solve some of the problems, but not all of them. If you are doing these things on a public blockchain, the technical difficulty is actually very high.
Pet Berisha:
We will now move on to the Q&A session.
audience:
Everyone is talking about USD stablecoins right now, but is there a demand for non-USD stablecoins?
Rob Hadick:
There's no obvious demand now, but it will definitely exist in the future. If all capital markets are on-chain, then there will be a need for stablecoins in multiple currencies; otherwise, you'll face exchange rate risk. For example, UK hedge funds, if their assets are denominated in pounds sterling, wouldn't want to bear the risk of dollar every time. Therefore, in the long run, multi-currency stablecoins will inevitably emerge. At the same time, from a broader perspective, we may be entering an era of "currency cold war," and whether so many different currencies will be needed in the future is itself a question worth discussing.
audience:
Stablecoins are already very useful in the financial system, but ordinary consumers still have a prejudice against "crypto". How long will it take to resolve this problem?
Noah Levine:
Many users are already using stablecoins, they just don't know it. For example, some new banking products are based on stablecoins, but users only see a regular account. So the key is to hide the encryption behind the product, rather than making the user aware of it.
Robert Mitchnick:
Another point is that stablecoins are not very attractive in the US domestic payment scenario, but they are very valuable in the cross-border scenario because there are more frictions and difficulties in obtaining US dollars.
Audience (Bloomberg):
If all assets are on-chain in 5-7 years, what will the market structure look like? Who will benefit, and who will suffer?
Robert Mitchnick:
This is a difficult question. But overall, the value chain will shorten and intermediaries will decrease. Currently, a stock transaction involves many roles: investors, prime brokers, exchanges, clearinghouses, custodians, transfer agents, fund managers, and so on. Many of these intermediaries can be streamlined and automated.
This is good for investors because of the increased efficiency; it's also an opportunity for asset management firms because they can reach more users; and it's an opportunity for crypto exchage because they currently only cover a small portion of global assets and can expand significantly in the future.
Pet Berisha:
Okay, that's all for today. Thank you to everyone listening live and online. Thank you to all the guests.
