Alpaca, a self-clearing broker-dealer, custodies more than $1.5 billion in shares backing tokenized equities and clears approximately 94% of the tokenized US stocks and ETFs market, according to the company. The concentration underscores how a single intermediary has become essential infrastructure for a sector originally pitched as removing middlemen from stock ownership.
On July 16, Alpaca raised $135 million in equity funding led by Peak XV, bringing its total funding package to $435 million when combined with debt from Payward, Kraken’s parent company, and BMO. The capital infusion reflects confidence in the tokenized equities infrastructure despite measurement uncertainty about the market’s true size.
Market trackers disagree on tokenized stock valuations. RWA.xyz measured roughly $1.85 billion in tokenized-stock value in early July, while CoinGecko counted closer to $487 million at the end of the first quarter. Alpaca’s $1.5 billion custody figure, if accurate, would represent the majority of the market by most public measurements.
Tokenization converts real-world assets into digital tokens on blockchain, allowing ownership or tracking of underlying assets. Applied to equities, tokenized stocks trade on crypto exchanges including Kraken and Binance 24/7 in fractional amounts without traditional brokerage accounts. The original sales pitch centered on disintermediation—removing intermediaries between investors and shares. When crypto platforms requested tokenized stock offerings, very few established brokers engaged, routing business through Alpaca instead.
Alpaca holds underlying stocks one-to-one, executes and clears trades, runs real-time minting and redemption through its Instant Tokenization Network, processes corporate actions like dividends and splits, supplies stock lending and short locates, and partnered with Broadridge for proxy voting and shareholder governance. Most Alpaca-backed products currently provide no voting rights and no direct dividend entitlement; claims run to the token issuer under contract before reaching the share.
A company spokesperson addressed concerns about lock-in, stating: “The arrangements aren’t designed to lock anyone in, that transferring the underlying positions through DTC takes days, and that the real timeline is set by rebuilding API integrations and coordinating minting and redemption cutovers with market makers.”
In June, a SpaceX IPO tokenization stress test resulted in over $1 billion in tokenized pre-IPO access sold through Kraken’s xStocks product, with $557 million sold on Binance alone. Campaigns were canceled on listing day and buyers refunded, highlighting operational risks in the emerging market.
The SEC’s January statement distinguished between issuer-sponsored tokens, which carry legal rights of shares, and third-party tokens, which offer only economic exposure plus intermediary risk. Most Alpaca-backed products fall into the latter category.
The Depository Trust and Clearing Corporation, the settlement backbone of the American stock market, holds over $114 trillion in securities custody and settled $4.7 quadrillion in transactions through its subsidiaries during 2025. DTCC is launching its Tokenization Service in October, allowing DTC-held securities to be issued directly as tokens with full voting rights, dividends, and legal ownership protections. The service will begin with the Russell 1000 index, major ETFs, and US Treasuries. On July 15, DTCC completed first production trades on its Tokenization Service with 30 or more firms participating. The SEC granted three-year authorization for the service in December 2025. A working group of 50 or more firms designed the service.
