The "Monopolist" Behind $4.6 Billion Tokenized U.S. Stocks: 91% of Assets Are Custodied by the Same Company?

Author: stein

Compiled by: ShenChao TechFlow

ShenChao Insight: As the integration of crypto assets and real-world assets (RWA) accelerates, tokenized U.S. stocks have quietly surpassed the $4.6 billion mark. However, beneath this prosperous facade lies an extremely concentrated underlying reality: over 91% of real stocks are custodied by the same U.S. compliant broker, Alpaca.

The long-prided "four powers separation" structure of issuance, trading, brokerage, and clearing on Wall Street is being completely disrupted by the end-to-end vertical integration model of crypto institutions. From immediate tokenized clearing workflows to top institutions jointly pushing for the modernization of transfer agent rules to the SEC, a fundamental reshaping that touches the core of traditional finance has already begun.

The Highly Concentrated Hidden Fact: Alpaca Monopolizes 91% of Tokenized U.S. Stock Custody

The RWA sector is experiencing astonishing growth, with the tokenized U.S. stock market quietly climbing to a total scale of $4.6 billion.

However, what is little known is that this seemingly vast ecosystem, constructed by dozens of decentralized protocols and fintech platforms worldwide, heavily relies on a single entity for its underlying assets.

Recent on-chain and regulatory filing data shows that of the $4.6 billion in circulating tokenized U.S. stocks, as much as $4.17 billion (over 91%) of the real underlying stocks are concentrated under the custody of a single licensed U.S. broker, Alpaca Securities.

Figure: Distribution of underlying brokers for global tokenized U.S. stock issuers and Alpaca's market share

Whether it’s Binance bStocks incubated by leading global crypto exchanges, mainstream RWA protocol Ondo Finance, emerging synthetic platform xStocks, retail trading giant Robinhood, or institutions like RealityFi and Coinbase, they all have deeply integrated into Alpaca's brokerage custody network.

Why do industry giants collectively choose Alpaca? The fundamental reason lies in Alpaca's successful creation of a developer-friendly brokerage API, dubbed the "Stripe of the securities trading world."

In the traditional financial world, if institutions want to conduct U.S. stock trading and custody services for global users, they must spend years applying for complex cross-jurisdiction broker and clearing licenses, with extremely high compliance and technical barriers.

Alpaca allows various on-chain issuers to complete compliant account opening, purchase real U.S. stock spot in bulk under institutional names, and achieve legal compliance and isolated custody through a few lines of simple code, significantly shortening the product launch cycle.

Traditional Wall Street vs. On-Chain Paradigm: Exchanges Are Consuming the Stock Market

Under a century-long mature legal framework on Wall Street, the operation of the securities market strictly follows the specialized checks and balances of the "four powers separation" logic.

Public companies are only responsible for issuing compliant securities; regulated securities exchanges (like the NYSE and NASDAQ) are responsible for listing, matching, and price discovery; compliant brokers are responsible for holding client funds and account management; and depository trust companies (DTC) control the centralized custody and cross-institutional clearing and settlement of all physical stocks.

This structure ensures that no single market entity can dominate, effectively preventing misappropriation and conflicts of interest.

Figure: Comparison of traditional Wall Street securities division system and on-chain vertical integration model

However, in the world of blockchain and Web3, this century-old division pattern is being completely overturned: a single commercial entity can achieve full-process "end-to-end vertical integration."

Take Binance's bStocks as an example; the platform is both the initiator and issuer of tokenized assets and the core venue for listing and organizing secondary liquidity trading, even directly controlling the settlement loop through integrated underlying brokerage channels.

The vertical integration model brings extreme capital turnover efficiency, completely eliminating cross-institution long-chain clearing frictions, achieving T+0 and even second-level instant settlement and 24/7 uninterrupted trading.

But at the same time, this high concentration has raised deep concerns among regulators and institutional investors: once a single point of failure or compliance review occurs, the systemic spillover risk of the centralized system will be exponentially amplified.

Issuers Each Have Their Own Character: Where Tokens Reside Determines Their Real Use

Although major issuers map the same S&P 500 underlying stocks like Apple, Nvidia, or Tesla, their survival trajectories and ecological niches on-chain are completely different.

Observing the specific address distribution where these tokenized stocks ultimately settle on-chain can provide the most intuitive insight into the real holders' usage scenarios and business intentions.

Figure: Analysis of on-chain asset distribution and holding forms of major tokenized stock issuers

Products represented by Binance bStocks are typical "exchange dwellers." Of its $1.4 billion circulation scale, over 80% remains static in the exchange's official deposit addresses and market makers' hot wallets, essentially being used as derivative trading tools for crypto retail investors to evade fiat currency foreign exchange controls, multi-currency collateral lending, and high-frequency contract arbitrage.

In stark contrast are projects like RealityFi, whose issued tokens exhibit highly decentralized "DeFi natives" characteristics, widely settling in personal self-custody wallets and various decentralized lending protocols and liquidity pools, truly integrating into the synthetic asset stack of decentralized finance.

Dissecting the Instant Tokenization System: Alpaca's Workflow and Settlement Logic

The core supporting the cross-border flow of these billions of dollars in assets lies in the instant tokenization clearing workflow built by Alpaca.

The entire business chain spans the off-chain fiat banking system, DTC centralized settlement system, and smart contract automated state machine, with its standard flow logic divided into four rigorous steps:

Figure: Alpaca's instant tokenization system technical architecture and cross-institution settlement workflow

First, market-making trading institutions set up dedicated corporate accounts at Alpaca, purchase the real U.S. stocks intended for tokenization through legally regulated channels, and complete T+1 spot delivery through the DTC official clearing system, recording it in Alpaca's custody ledger.

Second, trading institutions initiate minting requests to the tokenization protocol through restricted signatures, and smart contract nodes read Alpaca API's compliance custody proof in real-time to confirm that the underlying spot is fully locked.

Third, the smart contract mints equivalent tokenized stocks on the target blockchain (such as Ethereum, BNB Chain, or Arbitrum) at a 1:1 ratio and distributes them to market makers or investor accounts, achieving full-process transparency and traceability.

Fourth, when investors initiate reverse redemptions, the smart contract automatically destroys the corresponding number of on-chain tokens while triggering the API to notify Alpaca to sell an equivalent amount of stock spot in the secondary market, returning the fiat principal after deducting a small fee, forming a perfect closed loop.

The Ultimate Battle for Lifeblood: Four Giants Jointly Push SEC for Transfer Agent Reform

As tokenized U.S. stocks make rapid advances, top industry institutions have already realized: if the underlying legal ownership remains anchored in the centralized registry of the old era, tokenization will forever be merely a "derivative synthetic product," unable to truly step onto the grand stage.

Recently, four large institutions deeply engaged in compliant finance—Figure, Securitize, Bullish/Equiniti, and Plume Network—formally submitted a milestone joint petition to the U.S. Securities and Exchange Commission (SEC).

The petition strongly urges the SEC to comprehensively advance the modernization of regulatory rules for transfer agents.

In Wall Street's legal definition, transfer agents are an indispensable institutional cornerstone for all publicly listed companies. Public companies must designate a licensed transfer agent, whose maintained shareholder register (Stock Register) is the only legal basis for determining who the legitimate owners of the company are.

Once the SEC approves that the legal ownership register can be maintained and updated in real-time directly through public chains or compliant permissioned chains, the entire clearing foundation of the securities industry will undergo fundamental reshaping. At that time, tokens will no longer merely represent indirect claims on stocks; the tokens themselves will represent immutable legal stock ownership. This will not only clear the regulatory fog that has plagued the industry for years but will also pave the ultimate path for mainstream Wall Street assets worth trillions of dollars to be fully on-chain.