TL;DR
- Bitfinex argues tokenized securities are not automatically liquid because investors still need counterparties, reliable pricing and an effective route back to cash or underlying assets.
- DTCC’s upcoming service addresses that exit problem by letting institutions convert securities directly into tokens and back while DTC remains the legal depository.
- Hong Kong and U.S. frameworks show liquidity can still depend on market makers, arbitrage and redemption access, especially outside traditional market hours.
Bitfinex argues that tokenization does not automatically create liquidity, even when securities trade around the clock, settle onchain and move between networks. In its analysis, the exchange says investors need counterparties, reliable pricing and a route back to cash or the underlying security. That distinction matters as tokenized assets expand. A token can remain difficult to sell at a fair price if its exit mechanism is shallow or unavailable when traditional markets are closed.
Tokenization Still Depends on a Reliable Exit
The Depository Trust & Clearing Corporation is preparing a tokenization service that lets institutions convert securities held at its depository into digital tokens and back. DTC remains the legal depository, with conversions initially running on Canton and DTCC’s private Besu network for approved wallets. The structure links blockchain mobility to conventional custody rather than replacing it. DTCC’s model makes redemption part of the infrastructure, preserving a route between the tokenized representation and the security recorded in its books.
Bitfinex contrasts that model with secondary markets where liquidity depends on market makers. Hong Kong’s regulator has asked issuers of tokenized funds to use their best efforts to appoint one market maker per product and warned that trading can become thin, with large premiums or discounts to net asset value outside market hours. In those markets, a tokenized fund is only as deep as the liquidity provider quoting it. Continuous trading does not guarantee continuous price quality.
The U.S. framework presents another challenge. SEC-exempt tokenized securities venues must operate automated market maker pools on public blockchains for approved participants, but pool prices can diverge unless arbitrageurs close the gap. Venues must halt when the primary stock exchange halts, and weekend trading lacks a live reference price. The exemption does not require tokens to be redeemable for conventionally held shares. That leaves liquidity dependent on market makers moving efficiently between token, share and cash.
The same principle extends beyond equities. Bitfinex says the tokenized commodities market has grown from $1.43 billion at the start of 2025 to more than $5 billion, led by gold, where established pricing and vault infrastructure support exits. Treasury funds rely on issuer redemption, while other commodity structures must build their own conversion routes. The next test is whether investors can exit at fair prices during weekends, stressed markets or periods when conventional liquidity is unavailable.
