Alpaca Introduces Instant Tokenization Network for US Stocks

US broker-dealer Alpaca has unveiled a new Instant Tokenization Network (ITN) designed for institutions to easily create and redeem US stocks.

The ITN enables institutions to tokenize their portfolios with a single API call, allowing for the smooth suppression of underlying stock tokens without any payment delays, as announced by Alpaca on Wednesday. This service functions outside traditional market hours, providing 24/7 access.

By permitting physical redemption, the network strives to enhance the fluidity and efficiency of tokenized assets, enabling direct exchange between the underlying stocks and tokens instead of initially converting to cash.

Alpaca noted that this feature aligns with the recent initiatives from the U.S. Securities and Exchange Commission (SEC), which aim to tackle similar challenges within the crypto exchange-traded products (ETP) sector, particularly through the greenlighting of physical Spot Bitcoin (BTC) and Ether (ETH) ETFs.

“The process underlying ITN can be grasped as a single API facilitating two main functions,” Arush Sehgal, head of Crypto at Alpaca, shared with Cointelegraph. “The first function is the journaling of securities between accounts, applicable to US-regulated financial institutions. The second involves the delivery of tokens to certified participants by the issuer, often a non-US entity associated with a US institution that has completed the journaling in the first step.”

Alpaca provides essential infrastructure for recent tokenization efforts, including inventory and ETFs for tokenized stocks, as well as Ondo Finance’s platform for tokenizing Xstocks.

Wall Street and SEC Align on Tokenization

Industry data indicates that the tokenization of real assets has emerged as one of the standout blockchain investment trends in 2025, with over $31 billion in assets represented on-chain.

This movement in the US has garnered interest, receiving backing from regulatory authorities.

Following early tokenization efforts led by US Treasury bonds and private credit, tokenized stocks now appear to be the next area of exploration.

At the Token2049 Conference in Singapore, Rob Hadick, a general partner at Crypto Venture Capital Firm Dragonfly, emphasized that traditional finance is increasingly drawn to aspects like round-the-clock trading.

Yet, Hadick cautioned that institutional players are wary about engaging with retail-centered projects and blockchain infrastructure. “They prefer to retain control over elements such as privacy and who the validators are in their execution environment,” he explained.

This shift coincides with reports that the SEC is contemplating a framework to allow traditional stocks to trade on blockchain networks similarly to cryptocurrencies.