Tokenization becomes crypto's next bet
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Crypto companies are increasingly looking toward a new world — one of tokenization and digital assets as financial infrastructure — and are anxious to leave the cyclical pain from long, cold crypto winters behind.
Why it matters: The shift could give digital asset companies a more stable business model, less dependent on volatile trading volumes.
Driving the news: Bullish, a crypto exchange led by former NYSE president Tom Farley, agreed to acquire transfer agent Equiniti Tuesday for $4.25 billion in stock, representing a big push into tokenized equities.
- Coinbase Tuesday inked a deal with Centrifuge, furthering its push into tokenized markets that includes ETFs and credit products, CoinDesk noted.
- Coinbase CEO Brian Armstrong, announcing layoffs Tuesday, said crypto is "on the verge of the next wave of adoption," pointing to stablecoins, prediction markets and tokenization.
Last week during Robinhood's earnings call, CEO Vlad Tenev brushed off a question about crypto price swings during the company's earnings call.
- "I want to get away from talking about the price of bitcoin," he said. "Our strategy is to take crypto infrastructure and apply it to assets that have real-world utility. That's why we care so much about tokenization."
The big picture: Crypto companies are increasingly framing digital asset technology as financial plumbing — not just speculative assets.
- Tokenization is the process of moving real-world financial assets — everything from stocks to Treasuries and real estate — onto blockchain rails.
- The idea has long been a crypto talking point, but is gaining traction as traditional finance firms have gotten on board.
Zoom in: Larry Fink, the CEO of money management giant BlackRock, has predicted that it could transform finance.
- Nasdaq and DTCC — the plumbing behind traditional markets — are piloting blockchain-based settlement and tokenized securities.
Reality check: Tokenization remains early and largely experimental.
- Right now, there are roughly $27 billion of tokenized real-world assets on chain, Coinbase reported.
What's next: Crypto is two things, Tenov told analysts. "It's like bitcoin and other crypto native assets, which I can't tell you what the price is going to be in three months. Price moves up and down."
- "But what I can tell you is crypto as technology infrastructure is going to be big, and we're investing," he added.
