Tokenized securities are becoming part of traditional financial operations as banks expand their use of blockchain technology for financing, custody and settlement. According to Edwin Mata, CEO and co-founder of tokenization platform Brickken, recent developments involving BNY, Citadel Securities and Deutsche Bank suggest financial institutions are moving toward practical applications of tokenized assets.
The expansion reflects parts of the crypto industry increasingly focusing on bringing traditional financial instruments onto blockchain networks, including government bonds and equities. However, resistance from major US companies to tokenized versions of their shares highlights challenges facing the sector.
BNY and Citadel Demonstrate Efficiency Gains
BNY and Citadel Securities completed a transaction involving a tokenized two-year US Treasury note, marking the first use of tokenized assets on a major triparty repo platform. The Treasury was recorded on BNY's private digital ledger and settled within minutes rather than through the traditional next business day settlement cycle.
Citadel Securities subsequently used the tokenized Treasury as collateral to secure overnight financing. Mata said the transaction demonstrates how digital securities can move more efficiently between trading, settlement and financing activities, allowing financial institutions to access liquidity sooner and reduce capital tied up during transaction processing.
Mata expects more banks to explore similar arrangements involving government bonds and other liquid securities, although broader adoption will depend on connecting different custodians and financial platforms.
Deutsche Bank and JPMorgan Expand Services
Deutsche Bank is preparing to launch digital asset custody services in Germany, with plans to expand into Asia in 2027. The bank initially intends to support Bitcoin and Ethereum custody before introducing stablecoin transactions, tokenized deposits and blockchain-based securities issuance.
JPMorgan announced that it had expanded JPM Coin, its dollar-denominated deposit token, to Ethereum for institutional clients, following its initial launch on Base in November 2025. The expansion allows institutional clients to transfer tokenized dollar deposits around the clock, supporting faster payments and settlement of digital asset transactions.
US Companies Object to Tokenized Stock Trading
Despite growing institutional interest, tokenized equities are facing resistance from publicly listed companies concerned about blockchain-based trading. Nine US companies, including Broadcom, Verizon and CoreWeave, have objected to tokenized versions of their stocks trading on OKXICE, citing concerns over pricing, liquidity and volatility.
Mata said these objections could lead to greater issuer involvement in how tokenized shares are represented, traded and recorded. Platforms may also need stronger safeguards governing ownership records, corporate actions and price consistency between traditional and blockchain-based markets.
Industry Expansion Continues
Crypto companies are increasingly expanding beyond conventional digital assets into traditional financial products. Kraken's parent company, Payward, has expanded its partnership with Nasdaq to develop tokenized equity infrastructure, reflecting the industry's growing focus on integrating crypto with traditional markets.
Mata expects financial institutions to expand custody, issuance and settlement services over the next twelve months, with interoperability becoming an important factor in broader adoption. He noted that the next stage will focus on making these capabilities available across more institutions and markets, allowing issuers and investors to use tokenized securities more easily.
