Alpaca Dominates Tokenized US Stock Market with 94% Custody Share
The tokenized stock market, touted as decentralized and intermediary-free, has instead become reliant on a single California-based brokerage firm, Alpaca. According to Alpaca, it custodies over $1.5 billion in shares backing tokenized equities, representing approximately 94% of the tokenized US stock market.
This concentration of power is surprising given the initial promise of tokenization: to eliminate intermediaries and allow direct ownership and trading of assets on a blockchain. However, it appears that few established brokers were willing to take on this business when crypto platforms first emerged, leading Alpaca to fill the gap.
Alpaca's role has grown beyond simple custody, with the firm executing and clearing trades, processing corporate actions, and providing stock lending services to issuers and market makers. It also partners with Broadridge to offer proxy voting and shareholder governance for tokenized equities.