tl;dr
Alpaca launches Instant Tokenization Network (ITN) to enable instant minting and redemption of tokenized US stocks, boosting onchain liquidity and streamlining traditional finance integration.
**Alpaca Launches Instant Tokenization Network to Boost Onchain Liquidity for US Stocks**
In a significant move to address liquidity challenges in the tokenization market, US broker-dealer Alpaca has unveiled its **Instant Tokenization Network (ITN)**, enabling institutions to mint and redeem tokenized US stocks directly. This innovation aims to streamline the process of converting traditional equities into digital assets, potentially unlocking new efficiencies and liquidity in the blockchain-enabled financial ecosystem.
### How ITN Works
Alpaca’s ITN allows institutions to tokenize portfolios with a single API call, eliminating complex manual processes. The network facilitates **in-kind redemptions**, where tokenized stocks can be exchanged directly for their underlying shares without cash settlement delays. This feature is designed to enhance liquidity and reduce friction in the tokenization process.
Operational **24/7**, the ITN operates beyond traditional market hours, providing institutions with flexible access to tokenize and redeem assets. Arush Sehgal, Alpaca’s head of crypto, explained the dual functionality of the network:
1. **Journaling securities** between brokerage accounts for US-regulated financial institutions.
2. **Delivering tokens** to authorized participants, typically non-US entities affiliated with the initiating institution.
### Alignment with SEC Initiatives
The ITN aligns with the US Securities and Exchange Commission’s (SEC) efforts to address inefficiencies in the crypto exchange-traded product (ETP) market. Notably, the SEC’s recent approval of **in-kind creation and redemption mechanisms** for spot Bitcoin and Ether ETFs mirrors the ITN’s approach. This regulatory support underscores a growing openness to blockchain-based solutions for traditional assets.
### Broader Implications for Tokenization
Tokenization of real-world assets has emerged as a key trend in 2025, with over **$31 billion in assets now represented onchain**, according to industry data. While Treasury bonds and private credit led early adoption, tokenized stocks are now the next frontier. SEC Chair Paul Atkins recently praised tokenization as an “innovation,” signaling regulatory encouragement.
However, challenges remain. Institutional players are cautious about integrating blockchain infrastructure with retail-focused projects, prioritizing control over privacy, validator sets, and execution environments. Rob Hadick, general partner at crypto VC firm Dragonfly, noted: “They want to ensure they can control what’s happening in their execution environment.”
### Alpaca’s Role in Tokenization Ecosystems
Alpaca has already provided infrastructure for major tokenization initiatives, including Ondo Finance’s platform for tokenizing stocks and ETFs, and xStocks’ platform for tokenized equities. The company’s collaboration with Ondo Finance, alongside partnerships like the Solana Foundation and Bitget Wallet, highlights its growing influence in the space.
### Future Outlook
As the SEC explores frameworks for traditional equities to trade on blockchain networks, Alpaca’s ITN could serve as a blueprint for bridging traditional finance (TradFi) and decentralized systems. By reducing settlement times and enhancing liquidity, the ITN may accelerate the adoption of tokenized assets, fostering a more interconnected financial ecosystem.
For now, the focus remains on balancing innovation with regulatory compliance, ensuring institutions can leverage blockchain’s benefits while maintaining control over critical infrastructure. As the tokenization landscape evolves, Alpaca’s initiative marks a pivotal step toward a more liquid, efficient, and inclusive market.