Seth

THE FIRST JOB OF A DTC DIGITAL TWIN: Collateral Mobility Before Secondary Trading Independent Research | @AlphaCyl I. The Asset Does Not Need to Leave DTC The most important development in @The_DTCC tokenization programme may have little to do with secondary trading. On October 28, 2026, The Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC), launched its Tokenization Service. The service allows eligible participants to convert securities already held at DTC into tokenized representations that can move between registered digital wallets. DTCC holds more than $114 trillion in securities. Its stated objectives for tokenization include greater liquidity, collateral mobility and capital efficiency. The July 15 production event had already tested collateral pledges, securities lending, Treasury repo, equity delivery versus payment (DVP) and central counterparty (CCP) margin workflows. The launch initially supports 34 securities, representing approximately $30 trillion in assets under custody. Twenty DTC Participants have signed agreements to access the service. The interesting part is the structure. The underlying securities remain within DTC. The token represents the corresponding security entitlement, while DTC maintains the official record of token movements and holdings through its LedgerScan infrastructure. This paper argues that collateral mobility may become the first economically significant use case for DTC’s digital twins. The immediate opportunity is to make securities already held within the depository easier to deploy across financing, margin and collateral arrangements, without requiring their full withdrawal from DTC. That is a narrower proposition than the usual argument that tokenization will produce continuous securities trading. It is also a more practical starting point for institutional adoption. dtcc.com/press-releases/2026… dtcc.com/press-releases/2026… II. What DTC Actually Tokenizes The first distinction is between the underlying security and the entitlement represented by its token. In the traditional U.S. securities holding structure, DTC operates as the central securities depository. Securities are generally registered in the name of Cede & Co., DTC’s nominee, while DTC Participants maintain securities entitlements through their accounts. The tokenization service introduces another way to represent and transfer those entitlements. The process works in four stages: 1. A DTC Participant registers a digital wallet on a supported blockchain and submits a Tokenization Instruction for an eligible security held in its DTC account. 2. DTC applies its existing risk controls. Once the instruction is accepted, the relevant securities are debited from the Participant’s account and credited to DTC’s Digital Omnibus Account. 3. DTC’s ComposerX Factory system mints a token representing the corresponding security entitlement and delivers it to the registered wallet. 4. LedgerScan monitors blockchain movements and records the location of the tokens. Its record constitutes DTC’s official books and records for tokenized entitlements. The Digital Omnibus Account is particularly important. It holds the underlying traditional securities represented by the tokens. Those securities cannot be transferred out of the omnibus account until the corresponding tokens have been burned. This is the control against double spending. A Participant cannot transfer the token to another wallet and separately instruct DTC to transfer the same underlying security through its traditional books. The token movement or an authorized conversion back into book entry form must account for the entitlement. The legal registration of the underlying securities also remains in Cede & Co.’s name. Consequently, the digital twin gives the entitlement a blockchain based transfer mechanism while retaining the existing depository relationship. There is another important distinction concerning the holder. Only DTC Participants can register wallets under the @SECGov framework. A Participant may manage client sub wallets, but the DTC Participant associated with the registered wallet remains the entitlement holder of record in DTC’s system. This means the service provides a new way for institutional participants to manage and distribute their securities entitlements. It does not automatically turn every individual wallet holder into a directly registered shareholder. The SEC’s December 11, 2025 no action letter describes this arrangement in detail. sec.gov/files/tm/no-action/d… dtcclearning.com/helpfiles/d… III. Mechanism One: Turning a Security Into Mobile Collateral Collateral mobility concerns how quickly an institution can make an asset available to satisfy an obligation. A bank may hold Treasury securities, equities or other eligible instruments while simultaneously facing margin requirements, financing needs and obligations to multiple counterparties. The problem is often location and availability. An institution may have sufficient assets on its balance sheet but still face delays in making those assets available to the counterparty that needs them. The securities may sit with a custodian, within a particular settlement infrastructure or inside a collateral arrangement that requires several operational steps before they can be redeployed. A tokenized entitlement introduces a different movement mechanism. Consider a hypothetical dealer holding $100 million in eligible U.S. Treasury securities at DTC. The dealer needs to satisfy a margin obligation with an external counterparty. Under the traditional arrangement, the movement of securities may involve instructions between custodians, collateral agents and settlement infrastructure, together with eligibility checks, reconciliation and confirmation. Under a tokenized arrangement: - The dealer converts the eligible Treasury position into tokenized entitlements. -The tokens are delivered to a registered wallet. -The dealer transfers the relevant tokens to the counterparty’s registered wallet. -The receiving institution can verify the movement through the blockchain and DTC’s associated records. -The collateral arrangement governs the obligation, valuation, haircut and conditions for release. The underlying securities remain within DTC’s Digital Omnibus Account throughout the tokenized holding period. The operational advantage comes from moving the entitlement through a shared digital infrastructure rather than repeatedly processing movements through disconnected systems. This can reduce the time spent waiting for confirmation, reconciling positions and coordinating transfers between institutions. The distinction matters because collateral mobility can create economic value even when the underlying security never enters a public trading market. A Treasury that can be mobilized more efficiently may support financing, margin and liquidity requirements across multiple institutional relationships. The asset becomes more useful through its ability to move. IV. Mechanism Two: The Difference Between DTC Tokenization and Collateral AppChain There are two related DTCC initiatives that need to be separated. The first is the DTC Tokenization Service. It provides the mechanism for converting eligible securities held at DTC into tokenized entitlements, registering wallets, minting and burning tokens, and recording their movements. The second is the DTCC Collateral AppChain. It is a shared infrastructure platform designed to coordinate collateral management across providers, receivers, managers, triparty agents and custodians. The distinction is important. Tokenization gives the security entitlement a digital representation that can move between approved wallets. Collateral infrastructure determines how that asset can be deployed against an obligation. That second layer requires additional information and processes: - Asset eligibility. - Market valuation. - Collateral haircuts. - Margin requirements. - Counterparty agreements. - Allocation and substitution rules. - Settlement and release conditions. DTCC announced its collaboration with @chainlink on May 12 to integrate the Chainlink Runtime Environment (CRE) and data standard into Collateral AppChain. The integration is intended to support data and orchestration for asset pricing, valuations, eligibility, margining, collateral optimization and settlement. This is significant because a token transfer alone cannot determine whether an asset satisfies a particular collateral requirement. A receiving institution may accept one Treasury security at a particular haircut while rejecting an equity with the same market value. The collateral system must understand the agreement and the risk attached to each instrument. The AppChain is designed to coordinate those decisions and movements through shared infrastructure. DTCC has described its objective as supporting 24/7, near real-time collateral management across markets and blockchains. Its May announcement targeted Q4 2026 for the AppChain’s production launch. The two products therefore address different parts of the same operational problem: one makes eligible DTC securities mobile in digital form, while the other coordinates how collateral is identified, valued and deployed. dtcc.com/press-releases/2026… dtcc.com/products-and-servic… V. Three Cases From Production Case One: J.P. Morgan and CME Group, July 15 One of the clearest demonstrations of collateral mobility came during DTCC’s July production event. At 9:00 a.m. ET, J.P. Morgan successfully converted its position in the Invesco QQQ Trust (QQQ) into a tokenized asset. At 10:45 a.m., J.P. Morgan successfully posted tokenized assets to satisfy central counterparty margin requirements with CME Group. The significance is the destination of the asset. The tokenized securities were being used in an established institutional margin workflow rather than simply being transferred between digital wallets for demonstration purposes. This connects DTC held securities with the collateral requirements of a major derivatives clearing infrastructure. DTCC’s production record identifies the transaction as one of the day’s major demonstrations of tokenized collateral mobility. An important qualification: DTCC identifies the CCP margin workflow as operating through its separate Collateral AppChain product. The demonstration therefore validates the interaction between DTC-tokenized assets and collateral infrastructure, rather than proving that DTC itself has started assigning collateral value to tokens in its own risk-management system. dtcc.com/products-and-servic… Case Two: The First Onchain U.S. Treasury Repo, July 2026 Temple Digital Group announced on July 27 that it had executed a live onchain U.S. Treasury repo transaction using the DTCC Tokenization Service. The transaction involved a tokenized representation of a U.S. Treasury security financed against Circle’s USDCx on the Canton Network. Temple’s institutional RFQ platform coordinated the transaction. DRW and HIFI participated as principals, while Marex acted as prime broker and settlement agent. HIFI also confirmed its involvement in two onchain Treasury repo transactions during the July production initiative, executed through Temple Digital Group and Tradeweb. The cash leg involved converting USD from a fiat account into USDC and then USDCx on @CantonNetwork . The Treasury and cash legs settled against each other in the digital environment. The important feature was the separation of the underlying security from its digital movement. The Treasury remained within DTC’s existing book entry framework while its tokenized representation participated in the financing transaction. This is a particularly useful example because repo is fundamentally a financing arrangement. One party provides securities and receives cash, with an agreement to reverse the transaction at a later date. Tokenized securities can make the delivery and return of collateral more efficient, while tokenized cash can provide the corresponding payment leg. The transaction also demonstrates why securities tokenization and digital money need to develop together. A tokenized Treasury can move onchain, but the financing transaction still requires a reliable cash settlement instrument. templedigitalgroup.com/news/… templedigitalgroup.com/news/… Case Three: The Great Collateral Experiment, 2025 DTCC’s collateral mobility thesis predates the current Tokenization Service. In 2025, DTCC organized the Great Collateral Experiment to test how distributed ledger technology could improve collateral management across institutions. The experiment demonstrated the movement of tokenized assets through smart contracts incorporating collateral eligibility rules, haircut calculations and minimum transfer requirements. DTCC’s retrospective published on April 29, 2026, reported that processes that traditionally took hours or a full business day were compressed into seconds during the demonstration. The experiment also showed how participants could obtain immediate visibility into collateral movements rather than waiting for settlement confirmation. This matters because collateral management involves more than transferring securities. A margin call must be communicated, the collateral must satisfy agreed eligibility requirements, the receiving institution must obtain control, and the relevant records must be updated. The experiment tested how these activities could be coordinated through shared infrastructure. It also established an important foundation for the subsequent Collateral AppChain initiative. The 2025 experiment and the July 2026 DTC production event are separate milestones. The former tested broader tokenized collateral infrastructure; the latter demonstrated production transactions involving securities tokenized through DTC. dtcc.com/insights/2026/one-y… VI. The Economic Case: What Faster Collateral Actually Saves The business case for collateral mobility comes down to the cost of holding assets in the wrong place or waiting for them to become available. Institutions maintain liquidity buffers to meet unexpected funding requirements and margin calls. Some assets remain idle because moving them between counterparties or jurisdictions takes time. Others require financing while the institution waits for collateral to settle. Tokenized collateral can reduce these inefficiencies by allowing institutions to deploy assets closer to the moment they are needed. DTCC and Finadium examined this opportunity in their May 2026 paper, Collateral Infrastructure for Tokenized Capital Markets. One of the central use cases is intraday repo. Intraday repo allows institutions to obtain secured funding for shorter periods rather than relying on overnight financing or carrying larger liquidity buffers throughout the day. The paper compares daylight overdraft costs, using a 50-basis point Federal Reserve rate floor plus intermediary spreads, with intraday repo pricing of approximately 30–40 basis points. Under that scenario, intraday repo could reduce funding costs by up to half. The paper also cites @jpmorgan research suggesting that intraday repo could reduce operational costs by 56% compared with traditional funding sources across settlement risk, suboptimal capital management and data transmission errors. DTCC provides another illustrative calculation. In one model, applying Collateral AppChain to 15% of wholesale funding exposures, with a starting Liquidity Coverage Ratio of 130%, could reduce required High Quality Liquid Assets by 17%. These figures are modeled scenarios, not savings already realized by DTCC participants. The distinction matters. The economic benefit depends on how much funding activity moves onto the infrastructure, the assets accepted, the costs of implementation and the extent to which institutions can redeploy released capital. The same paper estimates that an institution adopting the infrastructure could free approximately $150 million in capital and generate $9 million in incremental bank-wide revenue during its first year under one set of assumptions. By year three, a scenario assuming 25% of business activity had moved to the platform estimated $1.9 billion in freed up capital and $225 million in incremental revenue. These projections illustrate the potential scale of the opportunity. They should be treated as scenario analysis rather than observed financial results. dtcc.com/-/media/collateral-… VII. The Structural Limitation: A Token Is Not Automatically Eligible Collateral There is an important restriction within the SEC’s authorization that changes how DTC’s tokenization service should be understood. Under the December 11, 2025 no action letter, DTC does not assign tokenized entitlements collateral value or settlement value when calculating a Participant’s Net Debit Cap or Collateral Monitor. These are part of DTC’s existing risk management framework. The restriction means that a tokenized security cannot simply be counted as collateral within DTC’s own risk calculations because it exists on a blockchain. This creates an important distinction between two types of collateral use. External collateral use A counterparty, clearing institution or financing provider may accept a DTC tokenized entitlement under its own eligibility rules, agreements and risk controls. The July production transactions demonstrated this broader possibility. DTC’s internal risk management DTC does not assign these tokens collateral or settlement value for its own Net Debit Cap and Collateral Monitor calculations under the authorized framework. The two arrangements operate under different rules. There are also operational restrictions. Only approved wallets can receive tokens. DTC screens registered wallets for OFAC compliance, and Participants remain responsible for the AML/KYC requirements associated with their customers. DTC also retains administrative capabilities, including the ability to reverse certain token movements and recover tokens in cases involving loss, theft or erroneous entries. The SEC authorization itself is limited. The December 2025 letter provides a no action position for the specified service and regulatory provisions. It does not constitute blanket SEC approval of every possible tokenized securities activity. The authorization runs for three years from the service’s launch. These restrictions show that institutional adoption is being built around controlled access, recognized ownership records and existing financial market safeguards. SEC No-Action Letter, December 11, 2025. DTCC Tokenization Service FAQ. sec.gov/files/tm/no-action/d… dtcc.com/-/media/Files/Downl… VIII. The Other Risk: Faster Settlement Can Change the Economics of Netting There is another question worth examining before treating faster collateral movement as an automatic improvement. Traditional financial institutions often benefit from netting. A dealer may have multiple repo transactions with different counterparties. Rather than settling every gross obligation independently, the institution can offset incoming and outgoing cash and securities movements, reducing the amount that actually needs to settle. Faster settlement can reduce the time assets spend in transit, but it can also reduce opportunities to net transactions. The @IMFNews examined this tension in Chapter 3 of its October 2026 Global Financial Stability Report, Scaling Tokenization: New Efficiencies, New Vulnerabilities. Its analysis highlights that shorter settlement cycles can increase gross bilateral settlement requirements when transactions that previously offset against one another must settle individually. Programmable batching may help preserve some netting benefits by grouping transactions before settlement. This introduces a trade off between immediate settlement and settlement efficiency. The IMF also reports that tokenized repo activity averages approximately $303 billion in daily volume, while the traditional U.S. repo market handles roughly $13 trillion daily. Despite the substantial tokenized activity, much of it remains concentrated among affiliated entities and private platforms. The lesson for DTC is that moving securities faster does not automatically create a more efficient financing market. The infrastructure must preserve the economic benefits of existing market arrangements while reducing unnecessary operational friction. Tokenized collateral must also maintain reliable valuation, enforceable security interests, settlement finality and clear procedures for default and collateral release. IMF, Global Financial Stability Report, October 2026, Chapter 3. IMF, What Is Needed for Tokenization to Deliver, October 8, 2026. imf.org/en/Publications/GFSR… imf.org/en/blogs/articles/20… IX. Where the Research Points The central thesis is that collateral mobility may provide the strongest initial economic justification for DTC’s digital twins. The July production event demonstrated that DTC held securities could enter collateral pledges, CCP margin workflows, securities lending and Treasury repo transactions. The October 28 launch has now established the service as a live institutional offering, with 20 Participants signed up and 34 securities available for tokenization at launch. However, the real measure of adoption will be how frequently these securities are deployed across financing and collateral arrangements, and whether the resulting operational improvements translate into measurable balance-sheet benefits. Three developments deserve particular attention: 1. The scale of collateral deployment. How much DTC tokenized securities value moves into actual collateral arrangements? The number of tokenized assets alone will tell us little about their economic utilization. 2. The integration between DTC and Collateral AppChain. Whether institutions can coordinate eligibility, valuation, margining and collateral movements across multiple counterparties and networks will determine how much value the combined infrastructure can deliver. 3. The expansion of collateral acceptance. The next important development is the number of clearing institutions, financing providers and collateral managers willing to accept DTC tokenized entitlements under their existing risk frameworks. There is also a fourth question: whether the same security entitlement can move between traditional and digital financing arrangements without creating additional settlement, reconciliation or liquidity costs. The future value of DTC’s digital twins will depend heavily on the answers. Tokenization gives the security another way to move. Collateral mobility gives that movement an economic purpose. The first major institutional benefit may come from making existing securities work harder across financial markets, rather than creating an entirely new secondary trading market around them

TOKENIZATION PERSPECTIVES #001 What Is Missing From Today’s Tokenization Infrastructure? Contributors : - @zinnresearch | founder @RefractionRWA - @RwaLlama ( RWA Research) - @0xlucasson |CMO @tokenforge - @SethRWAs (RWA Research) Tokenization infrastructure has developed considerably, with issuers, custodians, smart contracts and regulated platforms bringing traditional financial assets onchain. However, building the infrastructure to issue tokenized assets is only one part of developing functional tokenized markets. Questions around interoperability, asset verification, custody, investor eligibility, distribution, liquidity and transparency continue to shape the industry’s development. For the first edition of Tokenization Perspectives, we invited four people working across the RWA ecosystem to share their thoughts on one question: What Is Missing From Today’s Tokenization Infrastructure? @zinnresearch : We have the tokenization issuers and most marketplaces pretty much there, what's missing in my opinion is two things; Mechanisms for Proof of Reserve/Custody and Education. The first is something that even the traditional finance world still tackles when auditors finds holes in companies books in terms of assets, so how do we prevent this affecting the tokenization movement? If a hack occurs and the digital asset can be re-issued we have to make sure that the underlying asset is actually in the right custody and actually have the similar level of rights as to what the digital asset serves. I see DefiLlama starting to tackle this and you have protocols such as accountable but I feel having this extend all the way to the auditors in the traditional world will be the next step that needs to happen. Secondly, Education of what Tokenization provides and enables is severely crucial. An example of this can be seen by the objections by over 50 companies in the OKXICE, if these companies knew what further audiences this opens up and what safeguards are in place to prevent any foul play, they would be a lot more likely to participate in the innovation. There is a ton of certification and education when it comes to the traditional processes behind assets whether it be real estate or shares, we need to bring this to the tokenization movement so that the companies that we want to join in on this movement can make informed decisions. This extends to the potential users who could access all kinds of new asset classes as this will drive demand further encouraging companies to join the tokenization movement. @RwaLlama : Most of the hard engineering in tokenization is done. An issuer can put a fund or a share on a chain, decide who may hold it, and freeze it when something goes wrong. What is missing shows up the moment a token leaves the platform that issued it. Start with eligibility. Every issuer keeps its own list of approved wallets. Over eight years the industry has written at least six token standards, and each one runs the same check: is this buyer allowed to hold it? Each keeps the answer inside its own system. An investor cleared for one fund gets screened again for the next. A lender holding that fund as collateral can only sell to buyers already on that issuer's list, and in a bad week that list may be very short. What the market needs is a credential verified once by a regulated party and accepted by any compliant token, without the investor's file being copied to every issuer along the way. The other gap is visibility. Several big launches this year run on ledgers that only their participants can see. The rules for when an issuer may freeze a token or force a transfer usually sit deep in offering documents, written in general terms. Regulators can demand records after a failure. Investors and lenders need to check supply, the whitelist and every freeze while it happens, and to know the freeze policy before they buy. Any new platform can be judged by two questions. Can an investor cleared elsewhere buy without starting over? Can someone with no account check supply and freezes without asking permission? @0xlucasson : Surprisingly little on the technical side. Issuing a regulated tokenized security works. Registers, smart contracts, custody and even settlement in central bank money or regulated e-money are in place. What's missing sits around the technology, and it starts with distribution. Most tokenized issuances are still placed through the issuer's own network or a single primary platform. Investors have no easy way to discover them, compare them and judge them on reliable data. Many issuances end up undersubscribed even when the asset is sound, simply because too few of the right investors ever see it. That gap has consequences further down the line. Without broad distribution, there is little secondary trading. Licensed venues for tokenized securities are still rare, and the ones that exist often operate under pilot regimes with volume caps. Without trading, there are no reliable market prices. And without prices, the features everyone talks about don't work in practice. Lending, borrowing and using tokenized assets as collateral are technically possible today. Smart contracts can handle them, and price feeds exist. But a lender needs two things: a price it can trust and a market where it can sell the collateral if a loan goes bad. For tokenized money market funds or listed shares, both exist. For most private market bonds, neither does yet. So the missing piece is the layer that connects issuances with investors at scale: visibility, distribution partners, standardized data and regulated venues where assets can actually change hands. Once there is liquidity, collateral and lending become real use cases. @SethRWAs : Outside regulatory lucidity, what i believe is really missing from tokenization outlook today is interoperability standard for tokenized assets which further increase fragmentation already imminent in the technology. Even Defi venues have few specific tokenized assets they accept as collateral, irrespective of whether a set of similar underlying asset were brought onchain with same method.

FOUNDERS’ INSIGHT OF THE MONTH A selection of thoughts, observations, and industry perspectives from founders and executives building across the tokenization ecosystem. 1. @happytokenizing (Happy, @RWAFoundation_) x.com/happytokenizin… Happy observed that tokenized stocks have reached approximately the market size stablecoins had in early 2020. He also floated the possibility of the sector reaching $100B by the end of 2027 if it follows a similar growth trajectory. The comparison is interesting, although the underlying demand drivers deserve closer examination. Stablecoins grew because they solved an immediate problem in crypto: moving dollar denominated value between exchanges, protocols, and markets without relying on traditional banking hours. Tokenized equities have a different starting point. Beyond giving investors access to traditional stocks through blockchain infrastructure, the sector needs to establish stronger use cases around collateral, lending, settlement, and portfolio management. Reaching $100B would be a significant milestone. Whether that growth is sustainable will depend on how much financial utility develops around the assets themselves. 2. @mcagney (Mike Cagney, @Figure) x.com/mcagney/status… Cagney drew a distinction between tokenized equity wrappers and native issuance. His argument is that wrappers primarily improve access, while native issuance has the potential to change how securities interact with lending, margin requirements, and settlement systems. This is an important distinction when evaluating the economics of tokenized securities. A wrapped equity can provide blockchain based access to an existing financial instrument while retaining much of the infrastructure and restrictions of the traditional market. Native issuance presents a different opportunity because the security originates within the blockchain environment. That opens the door to integrating securities directly into onchain financial applications, including collateral markets and automated settlement. The opportunity in tokenized equities goes beyond reproducing the stock market on another network. It is the possibility of building new financial applications around the securities themselves. 3. @leviadam1 (Adam Levi, @xStocksFi) x.com/leviadam1/stat… Levi described tokenized equities as the next stage of crypto adoption, pointing to the work with @krakenfx , @Bybit_Official , and @solana as part of the effort to bring these products to a global audience. Distribution is certainly important. Having established exchanges and blockchain ecosystems involved gives tokenized equities access to existing user bases and trading infrastructure. However, the legal structure behind these products remains equally important. The ability to access a tokenized stock depends on the underlying issuance arrangement, jurisdictional restrictions, and the regulatory framework governing its distribution. A product can have global visibility without having universal investor eligibility. For the sector, the next meaningful development will be the expansion of the legal and financial infrastructure that determines who can actually own, transfer, and use these securities. 4. @kadiogluakin (Akın, @bondifinance) x.com/kadiogluakin/s… Akın challenged the conventional argument around custody, suggesting that centralized custody arrangements are currently more broken than self-custody and that investors should consider taking greater control of their assets until centralized alternatives improve. This brings an important question into the RWA conversation: who actually controls the asset after it has been tokenized? Corporate bonds offer an interesting example. These instruments have traditionally been distributed in large denominations, with institutional investors accounting for a significant portion of the market. Onchain issuance can reduce minimum investment requirements and broaden participation. However, smaller denominations also need functioning secondary markets, efficient settlement, and clear ownership arrangements. Making bonds accessible to smaller investors is one achievement. Giving those investors the ability to manage their positions efficiently is another. 5. @mv1_Davis (Alex Davis, @MavrykNetwork) x.com/mv1_Davis/stat… Following the Binance incident, Davis reiterated the importance of self custody and argued that the industry needs more accessible non-custodial solutions. I think this conversation becomes particularly important as more real world assets enter DeFi. Tokenization changes how ownership can be represented and transferred, but it does not automatically change the custody arrangements surrounding an asset. Users can still depend on centralized platforms, custodians, and intermediaries to access their holdings. Self-custody reduces certain counterparty dependencies, although it introduces its own responsibilities around private key management, recovery, and transaction security. The challenge for builders is making non custodial ownership practical enough for everyday users and sophisticated enough for institutional participants. 6. @karnsaroya (Karn Saroya, @re) x.com/karnsaroya/sta… Saroya brought attention to the relationship between global capital formation and the amount of capital available to absorb economic risk. He pointed out that the US issues approximately $200B in net new Treasuries every month, while global reinsurance capital stands at roughly $800B, backing a wide range of economic, commercial, and personal risks. His broader argument is that periods of major technological transformation create new categories of risk, and those risks require capital capable of supporting the businesses and institutions taking them. This is particularly relevant to insurance. As new technologies, industries, and business models emerge, insurers and reinsurers have to continuously assess unfamiliar exposures and determine how much capital should be allocated to them. Onchain infrastructure could improve aspects of insurance distribution, capital allocation, policy administration, and claims settlement. However, the availability of capital will still depend on underwriting quality, risk modelling, and regulatory capital requirements. The opportunity is not simply to tokenize insurance products. It is to make risk transfer and capital allocation more efficient. 7. @billtlee (Bill Lee, @DualMintRWA) x.com/billtlee/statu… Lee questioned the traditional approach to credit underwriting by comparing personal credit assessments with the actual operating performance of revenue generating assets. His laundromat example is particularly interesting. A business with machines generating consistent revenue through high utilization could represent a stronger lending opportunity than an individual with an attractive credit score but limited cash flow. Traditional lending has historically placed considerable weight on the borrower’s financial history, income, and credit profile. Asset level financing creates an opportunity to evaluate the economic activity producing the repayment capacity. Imagine financing commercial equipment using verifiable operating revenue, transaction records, and utilization data as part of the underwriting process. This could expand credit access for businesses whose productive assets generate reliable cash flows but whose owners may not fit conventional lending profiles. For RWA lending, the opportunity is to move beyond simply putting traditional loans onchain and start rethinking how creditworthiness is established. 8. @chriseyin (Chris Yin, @plumenetwork) x.com/chriseyin/stat… Yin discussed Plume’s work with Fidelity to bring investment products onchain, noting that early institutional demand concentrated around short-duration Treasury products, while capital allocators are increasingly interested in longer duration and actively managed strategies. This is an important development in the evolution of institutional RWA products. Short duration Treasuries provided a relatively straightforward entry point because investors already understood the underlying instruments, their risk profiles, and their role in portfolio management. Longer duration products introduce different considerations, including interest rate sensitivity, liquidity management, valuation, and investment strategy. The shift also suggests that institutional demand may be moving beyond simply accessing tokenized versions of familiar cash equivalent instruments. The next phase of adoption could involve bringing a broader range of professionally managed investment strategies into blockchain based distribution and settlement systems. 9. @tn_pendle (TN, @pendle_fi) x.com/tn_pendle/stat… TN described RWAs as a 100x opportunity and highlighted the importance of understanding the sector through conversations with people building from the institutional side. He also pointed to Pendle’s RWA Insights series. I agree that institutional perspectives are important because they expose some of the requirements that are easy to overlook when evaluating tokenization from a purely cryptonative standpoint. Take tokenized Treasuries, for example. Their value in traditional finance extends beyond holding government debt. They participate in collateral arrangements, repo markets, financing transactions, and other institutional activities. Bringing the underlying asset onchain provides a new settlement and ownership environment. Recreating the financial utility surrounding that asset requires additional infrastructure. This is where the next generation of RWA protocols will have to compete: building the lending, collateral, liquidity, and yield infrastructure that allows tokenized assets to become productive financial instruments. 10. @YuvalRooz (Yuval Rooz, @CantonNetwork) x.com/YuvalRooz/stat… Rooz discussed Uber’s pilot involving the movement of operating cash into yield-generating products on Canton, with privacy incorporated into the process. Corporate treasury management is an interesting area for blockchain adoption because large companies routinely manage substantial cash balances across multiple accounts, financial products, and jurisdictions. Some of that capital may remain in relatively low-yielding positions because moving funds between financial institutions and investment products involves operational procedures, settlement delays, and internal approvals. A system that allows companies to move capital more efficiently while maintaining transaction privacy could improve treasury operations and liquidity management. What makes this development particularly interesting is the involvement of Uber. This moves the conversation beyond theoretical discussions about institutional adoption and into an actual corporate treasury use case. If these arrangements prove practical at scale, corporate cash management could become a significant market for blockchain-based financial infrastructure. 11. @DennisMidas (Dennis Dinkelmeyer, @MidasRWA) x.com/DennisMidas/st… Midas had published an incident response framework earlier in the year and subsequently followed that process during the recent market stress. The approach involved pausing affected operations where necessary, verifying underlying assets and oracle data, restoring functionality progressively, and maintaining communication throughout the process. This is an important aspect of institutional RWA infrastructure that often receives less attention than issuance figures and total value locked. When financial products depend on external custodians, asset managers, oracles, and other service providers, operational disruptions can affect the entire system. Investors need to understand how a platform responds when something goes wrong, particularly when the underlying assets represent real financial claims. Publishing a response framework is useful, but demonstrating that it can be executed under difficult market conditions provides a different level of assurance. Operational resilience is an important part of building institutional confidence in tokenized financial products. 12. @doctorfission (Jonathan Shaffer, @Fissionxyz) x.com/doctorfission/… Shaffer highlighted the potential of bringing private markets onchain, particularly through making fund positions easier to access, transfer, and use as collateral. This touches on one of the structural limitations of private markets: investors can hold valuable positions but often have limited flexibility when they need to exit or redeploy their capital. Tokenization could improve how ownership interests are recorded, distributed, and transferred. It could also create opportunities to use eligible fund positions within broader financial applications. However, transferability and liquidity are different economic properties. A tokenized fund position may be technically transferable while remaining difficult to sell because of investor restrictions, valuation requirements, or a lack of willing buyers. The more interesting development would be an ecosystem where eligible private-market interests can circulate through compliant secondary markets and potentially support collateralized financing. That would give investors more flexibility in managing capital committed to traditionally illiquid assets. 13. @Autholykos (Emanuele Francioni, @DuskFoundation) x.com/Autholykos/sta… Francioni discussed open weights as a path towards self-sovereignty, drawing a comparison with the original aspirations of crypto. His observation raises an interesting question about control over the infrastructure people depend on, particularly as AI systems become increasingly integrated into financial and digital services. For the RWA industry, a related question exists around privacy and regulatory transparency. Institutional participants need to protect sensitive information, including transaction balances, counterparties, and commercial activity. At the same time, regulated financial products must support verification, reporting, and compliance requirements. Fully transparent public infrastructure can expose information institutions would prefer to keep confidential. Completely private systems can make independent verification difficult. Selective disclosure offers a way to approach both requirements: allowing participants to prove specific information about their activities without exposing their entire financial history. This is an important architectural consideration for blockchain infrastructure seeking adoption in regulated financial markets. 14. @mikebelshe (Mike Belshe, @BitGo) x.com/mikebelshe/sta… Belshe reiterated that security is a continuous process, emphasizing the need to keep raising standards as the industry evolves. This is particularly relevant to tokenized finance because the infrastructure connects valuable offchain assets to blockchain-based ownership and transaction systems. The security requirements extend beyond smart contracts. Private-key management, custody arrangements, transaction authorization, access controls, and operational procedures all contribute to the integrity of the system. A weakness in any of these areas can create consequences for investors and institutions relying on the platform. As tokenized assets grow in value and complexity, security standards will have to evolve accordingly. Institutional adoption requires confidence in the entire infrastructure supporting an asset, from its issuance and custody to its eventual transfer or redemption.