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Summary Tokenization is revolutionizing finance, enabling instant, low-cost, 24/7 asset transfers and programmable money through blockchain-based stablecoins like USDC and USDT. Coinbase, Robinhood, and Circle stand out as investment opportunities, as they are leading the infrastructure buildout for digital assets and tokenized finance. Key catalysts include regulatory clarity, institutional adoption, and integration by payment giants like Visa and Mastercard, driving growth and mainstream acceptance. Despite regulatory and technological risks, tokenization offers a generational investment opportunity, with early adopters poised for outsized returns as financial rails are rebuilt. Thesis The financial infrastructure for moving money and assets in the US is quietly changing. The era of 3-day ACH cash transfers and illiquid bond markets is coming to an end. This is because of tokenization. Tokenization is the process of using digital tokens to represent ownership of an asset. This can be ownership of any assets, including dollars, treasuries, bonds, and even real estate. Once assets are tokenized, they can be recorded on blockchain networks. Blockchain networks allow for instant, minimal-fee transactions and will be the new rails for financial infrastructure. This summer, Trump signed the GENIUS Act . This act was part of Trump's 2024 campaign, in which he declared he would be the crypto-friendly president and give regulatory clarity to the market. The GENIUS Act is important because it recognized stablecoins as part of the US financial system. Stablecoins are the tokenization of the US dollar and have been one of the most successful adoptions of tokenization technology so far. Use of stablecoins has taken off; in 2024, there were $18.4 trillion in digital asset transactions. In April the stablecoin supply hit $300 billion , about 1% of the supply of the US dollar, and the US Treasury Department expects it to reach $2 trillion by 2028. Stablecoin Transaction Volume (Coinbase) Stablecoins are not issued by the government; they are a private market creation. The two most dominant suppliers are Circle ( CRCL ) and Tether. The two issued $12 billion in new stablecoins in August alone. Right now, stablecoins are most popular for people living in high-inflation economies or freelance workers in emerging markets. Currently, there are about 30 million users sending stablecoins monthly. The popularity of stablecoins has led companies like Visa ( V ), Stripe, and Coinbase ( COIN ) to all begin developing settlement rails on the blockchain. In the next 3 to 5 years I expect tokenization to reshape global payments, asset management, and securities trading. During these early adoption years, investors have the opportunity to buy the companies that will be building and owning the new financial infrastructure. What Tokenization Really Means This leaves the question, why would consumers and institutions be interested in tokenization? It may seem like this is just a technology for people who live outside the luxuries of the US, but these technologies will be beneficial for everyone. The easiest way I find to think about this transformation is to look at when the internet was taking over. Before the internet, people used physical mail and fax. The internet then came and allowed for instant data sharing. Tokenization will replace legacy financial rails, like ACH and SWIFT, with blockchain rails. Blockchain rails will be a huge improvement because they allow for 24/7 instant settlements, minimal transaction costs, and fractional ownership. Additionally, tokenized assets will bring greater accessibility to retail investors. Investment categories currently reserved for institutions, like private credit funds or real estate, will be accessible to anyone. This gives more opportunity to everyday investors and greater liquidity to the asset owners. Stablecoins are a great example of what is to come with tokenization. Stablecoins are only the start; this technology can be applied to every major asset class and bring new benefits. Tokenized securities will be able to settle trades instantly. Real estate and private credit, traditionally illiquid markets, will receive a huge liquidity boost. Blockchain rails will make commodity and carbon credit markets more transparent and traceable through smart contracts . This will reduce fraud, prevent double-counting, and allow regulators and companies to see a real-time view of supply and ownership. Blockchain rails will also help in automating financial functions. Tokenized transactions will all happen through smart contracts. Smart contracts will allow for escrow payments to be released instantly, process insurance claims, and manage loans all without any manual steps. Tokenization is much more than just digital dollars. Tokenization will make our financial system faster, cheaper, and more reliable for all assets. While tokenization is seemingly taking off now, the idea has actually been around for a while. Tokenization started in 2001 as a data protection mechanism. In 2019, Facebook ( META ) was trying their own version of tokenization through the Libra project . The Libra project promised fast, low-cost transactions using tokenized assets of real-world value, likely for the metaverse. The project was eventually abandoned in 2019 under regulatory pressure. Today, companies like Circle, Visa, and Coinbase are achieving what Facebook had hoped for. The Global Context: America's Payment Lag Despite all the innovative dominance the US has had over the last century, our basic financial infrastructure is well behind our peers. In Brazil, China, and India, instant, minimal-fee money transfers are just an everyday occurrence. In Brazil they have the government-issued Pix, which has 182 million users doing 24/7 payments and zero transaction fees. In India they use UPI, which processes 18 billion transactions per month . In China they have two platforms with these capabilities, WeChat Pay and Alipay. All these platforms are great, and the users are satisfied, so why has this not been done in the US? The truth is the US did try to catch up and modernize the payment infrastructure; it just was not successful. In 2023, the Federal Reserve launched FedNow . FedNow promised many of the same capabilities as our foreign counterparts platforms, but the rollout was flawed. One issue was that participation was only voluntary. Of the 9,000 US banks, only a few hundred joined, but this makes sense. Banks chose not to join because it required expensive infrastructure upgrades and little short-term incentive. Larger banks like JPMorgan and Wells Fargo have their own private versions of this technology, so it is not in their interest to support a competing platform run by the Federal Reserve. Another failure of FedNow is that it fails to connect with fintechs like PayPal ( PYPL ), Cash App, or Coinbase. This limits its reach from the users driving digital payments growth. Tokenization is the private-market alternative to what FedNow was supposed to achieve. Stablecoins are now achieving what Pix and UPI already do. If the US can harness this through private-sector innovation, there will be a huge boost to the possibilities and rate of financial innovation. Key Catalysts in the Next 3-5 Years For the success of tokenization to continue, it will be important to see development in key areas of the infrastructure. First, the blockchain infrastructure will need to be able to handle real-world payment volume. Solana and Ethereum are the technologies that handle on-chain transactions. Currently, Solana has a theoretical capacity of 65,000 transactions per second, which is exactly on par with Visa , but they only average 900 to 3,500 real-time TPS right now. Institutions would likely want to see this scale to earn greater confidence. Institutional adoption will also be a huge catalyst. There have already been some, with firms like BlackRock ( BLK ) and Franklin Templeton ( BEN ) issuing on-chain funds that allow 24/7 trading, faster settlement, and higher liquidity for fixed-income investors. Finally, global regulatory frameworks to establish clarity following the GENIUS Act and Europe's MiCA will be hugely important. Global frameworks will allow banks and fintechs to safely issue and integrate tokenized assets instead of pausing their innovation due to regulatory uncertainties. Where to Invest As with the internet, the best exposure lies in the companies building the rails of this new system. These companies are well positioned to capture value as tokenization scales. Coinbase Global - Buy Coinbase is the most publicly accessible way to invest in digital asset infrastructure. They are the regulated infrastructure center that is powering US digital asset adoption. Coinbase is Circle's key partner in issuing their US dollar stablecoin, USDC. Coinbase earns interest income from their stablecoin reserves and fees from on-chain activity through its Base blockchain. In Q3 2025 , Coinbase reported $1.87B in revenue, up 55% year-over-year. Coinbase has over $28B in USDC reserves, allowing them to earn a 4-5% yield from Treasuries. Coinbase has direct exposure to US regulation and growing institutional inflows. They are set to benefit from both trading activity and the broader tokenization trend. Coinbase is a category leader and will likely be a long-term compounder in tokenized finance. Robinhood Markets ( HOOD ) - Buy For the last few years, Robinhood has continued to out-innovate legacy brokerages again and again. Now, Robinhood has quietly evolved into a digital-asset platform through its acquisition of Bitstamp and its integration of stablecoin payment options. In Q3 2025 , Robinhood reported $618 million in revenue, up 18% year-over-year, and its crypto trading volume was up 80%. Robinhood's goal is to enable 24/7 tokenized stock trading. They are positioning themselves as a bridge between traditional finance and decentralized finance. Robinhood could very likely be the first brokerage to offer seamless exposure to tokenized securities for retail investors. Circle Internet Group - Hold Circle IPO'd in June 2025 and is the purest play on the tokenization of the US dollar. Circle operates as the issuer and the infrastructure provider behind the USDC stablecoin. Circle has integrations from Stripe , Visa, and AWS . Their ecosystem sees billions in global payments. Circle earns yield on its Treasury-backed reserves while facilitating instant, low-cost transfers for businesses and consumers worldwide. In Q3 2025 , they earned $740 million in revenue, up 66% year-over-year. Circle stands out among other investment opportunities because it is one of the most regulated players in digital finance. Circle has licenses in the US, EU, and Asia. Also important to recognize that Circle holds roughly 25% of the global stablecoin market, second to Tether's 67%. Circle has done well to position itself as the digital feed of tokenized money. I am confident in Circle's long-term role as being a key player in the distribution of the tokenized dollar but feel that the near-term risk is too high currently. Since a lot of demand for USDC is driven by high-interest rates, current interest rate uncertainties are driving a volatile market reaction. In addition, rising operating expenses create margin pressure. When compared to Tether, Circle has slower growth and higher transparency costs due to being in the US and public, where Tether has all the benefits of being offshore. I rate the stock a hold for now but would look to accumulate once market reaction and rate expectations stabilize. Supplemental and Indirect Opportunities While exchanges and issuers are the current face of investment in the space, the tokenized ecosystem is expanding, and new opportunities are being realized. The table below compares some important public players alongside key blockchains and ETFs that enable or benefit from a tokenized economy. Company/Asset Ticker Market Cap / AUM / Token Size 2025 Revenue YoY Growth Valuation Metric Role in Tokenization Coinbase Global ((COIN)) $62B $5.6B +40% 8x Fwd Sales Core US exchange & USDC co-issuer Robinhood Markets ((HOOD)) $16B $2.4B +18% 4x Fwd Sales Retail brokerage integrating tokenized trading & payments Circle Internet Financial ((CRCL)) $11B $1.9B +60% 12 Fwd Earnings USDC issuer; core digital dollar infrastructure Visa Inc. ((V)) $540B $36B +10% 27x Fwd Earnings Global payments network settling USDC transactions Mastercard Inc. (MA) $460B $33B +12% 28x Fwd Earnings Developing tokenized identity & on-chain clearing DeFi Technologies (DEFT) $250M $65M +45% 4x Sales Operates Valour ETPs offering tokenized asset exposure in Europe Solana (SOL-USD) $70B $350M +100%+ -- High-speed blockchain supporting Visa & Stripe Pilots Ethereum ETF (ETHA) $10B $1B +60% ETF Smart-contract layer enabling tokenized assets and settlement VanEck Digital Transformation (DAPP) $250M -- -- ETF Diversified exposure to tokenized leaders (COIN, MARA, etc.) Coinbase, Robinhood, and Circle all continue to trade at modest revenue or earnings multiples despite having faster growth than their legacy incumbents. Visa, Mastercard, and PayPal command higher valuations from their reputations and payment dominance, but they are only just beginning their blockchain integration. I believe Solana, Ethereum, and DeFi Technologies to be interesting investment opportunities under this thesis, as they serve as the technical backbone of tokenization. Solana is a provider of high-speed, low-cost infrastructure that enables real-time stablecoin and asset transfers. Ethereum is behind the smart contracts that underpin most tokenized assets. DeFi Technologies is helping connect traditional finance to the blockchain by creating publicly tradable investment products tied to digital assets. DeFi Technologies helps everyday and institutional investors get access to this new market on regulated exchanges. Risks to the Thesis The greatest risk against the thesis is regulatory execution risk. The GENIUS Act was lobbied against by traditional banks before eventually passing. Traditional banks will likely continue to try to push back against this disruptive technology. As this is a new space, it is important that the companies can be given clear regulations to work under so that they can build quickly. The next greatest risks are from technology and competition. Solana and Ethereum will need to reach Visa-level reliability before mainstream financial institutions can rely on them. There is also the risk that Big Tech could integrate its own stablecoins or tokenized payment solutions, which could change the market dynamics and the investment opportunity. Skeptics will be quick to point out that much of today's stablecoin demand is driven by high US interest rates. This implies that when Treasury yields fall, stablecoin revenues could decline and slow the sector's growth. However, this ignores the long-term value of tokenization. Tokenization is quickly being adopted because of its faster settlement, lower transaction costs, and 24/7 accessibility. These are advantages that will remain even in low-rate environments. Despite these risks, momentum for this transition is undeniable. It is majorly positive that financial firms are looking to quickly adapt rather than resist. The Next Payment Rail Is Already Here The transition toward tokenized finance has already begun, and there is no going back. Stablecoin adoption is surging, and the usage is growing fast in developing economies. Visa and Mastercard piloting stablecoin settlement and Stripe launching stablecoin payment tools validate that tokenization is heading to the mainstream. For investors, it is important to look at this as an infrastructure story instead of associating it with the speculative nature of crypto investing. The rails for payments and all things finance are being rebuilt. Those owning the pipes in this new system will benefit most. In the next 3 to 5 years, there is no other opportunity in fintech offering the same asymmetric returns. Investing right now allows investors to own the digital equivalent of Visa in the 1970s.