Despite promises of decentralization, nearly all tokenized U.S. equities rely on a single California broker for custody and clearing, raising new questions as DTCC readies its own blockchain tokenization service
Tokenized stocks have been promoted as a way to bypass traditional intermediaries, letting users hold and trade digital representations of real-world equities directly on blockchains. But in practice, the vast majority of these assets depend on a single brokerage: Alpaca. According to company statements and public market trackers, Alpaca currently custodies over $1.5 billion in U.S. shares backing tokenized equities and clears roughly 94% of the market. This concentration exposes a critical layer of centralization beneath a product often marketed as decentralized.
Tokenization allows a real-world asset, such as Apple or Nvidia stock, to be represented as a blockchain token. These tokens can be traded 24/7 on crypto exchanges, often in fractional amounts, and are accessible to users worldwide. The appeal is clear: exposure to U.S. equities without a traditional brokerage account, with faster settlement and global access. Yet, for these tokens to function, a licensed broker must actually purchase and hold the underlying shares, ensuring the token supply matches the real inventory. When crypto platforms sought partners for this business, few established brokers were willing to participate. Alpaca, a self-clearing broker-dealer based in California, stepped in and quickly became the dominant counterparty for tokenized U.S. stocks and ETFs.
Centralization Risks
Alpaca's role extends beyond simple custody. The company says it executes and clears trades, manages real-time minting and redemption of tokens through its Instant Tokenization Network, and processes corporate actions like dividends and stock splits for its partners. Alpaca also provides stock lending, short locates, and insured cash sweeps to token issuers and their market makers. Its client list includes major crypto exchanges and platforms such as Binance, Kraken, Ondo, and Dinari, covering most tokenized equity products available to retail buyers.
Despite the appearance of decentralization at the user level, the market's reliance on Alpaca creates a single point of failure. The U.S. Securities and Exchange Commission (SEC) has warned that third-party tokenized securities may expose investors to additional risks, including the possibility that the intermediary holding the underlying shares could fail. Most Alpaca-backed tokens do not grant holders voting rights or direct dividend entitlements; instead, users have a contractual claim against the issuer, not the underlying stock. Efforts to add shareholder governance, such as Alpaca's partnership with Broadridge, remain in early stages and do not yet provide full parity with direct stock ownership.
Market Data and Discrepancies
Alpaca's reported $1.5 billion in tokenized equity custody, measured as of July 2026, is based on the value of shares backing tokens in active circulation. Public trackers such as RWA.xyz and CoinGecko report widely varying figures for the total tokenized stock market, ranging from about $487 million to $1.85 billion, depending on methodology and timing. This makes it difficult to independently verify Alpaca's claimed market share, though available data supports the view that it is the dominant player. The lack of standardized reporting and reconciliation between company statements and public dashboards leaves some uncertainty about the true scale and concentration of the market.
The market's fragility was highlighted in June, when several exchanges sold over $1 billion in tokenized pre-IPO access to SpaceX shares through xStocks, only for the campaigns to be canceled and buyers refunded after the shares failed to materialize. The breakdown occurred upstream of Alpaca, but the episode underscored the reliance on a chain of intermediaries and the risk that tokenized exposure may not always translate into actual ownership or delivery.
DTCC's Tokenization Service
The landscape is set to change in October, when the Depository Trust and Clearing Corporation (DTCC)-the backbone of U.S. securities settlement-launches its own Tokenization Service. Through its Depository Trust Company (DTC) subsidiary, DTCC holds over $114 trillion in securities and settles quadrillions of dollars in transactions annually. The new service will allow DTC-held securities to be issued directly as blockchain tokens, with full shareholder rights and legal ownership attached. The initial rollout will cover the Russell 1000, major ETFs, and U.S. Treasuries, and is backed by a three-year SEC authorization.
Unlike most current tokenized stocks, which offer only economic exposure and depend on third-party intermediaries, DTCC-issued tokens will originate within the official settlement system and provide the same rights as traditional shares. This could attract institutional investors who have so far avoided third-party products due to legal and operational uncertainties. The first production trades using DTCC's system took place in July, with Alpaca participating as both a self-clearing broker and a member of the industry working group that helped design the service.
Future Scenarios
Alpaca's future role is now in question. The company argues that while DTCC will provide the settlement layer, brokers like Alpaca will remain essential for clearing, margin, stock lending, and other services that support large-scale trading. Alpaca has already demonstrated its ability to mint and redeem DTCC tokens through its own infrastructure. But as DTCC opens its service to all DTC participants, other brokers could match Alpaca's connectivity, potentially eroding its early lead. Alternatively, the market could split, with DTCC-issued tokens serving regulated institutions and third-party tokens remaining popular offshore.
For now, the evidence suggests that tokenized stocks are decentralized at the user interface but highly concentrated at the brokerage layer. Alpaca's dominance has shaped the market's structure and rules, but the arrival of DTCC's service may force a realignment. The outcome will determine whether tokenized equities can deliver on their promise of reducing intermediaries-or simply replace old ones with new gatekeepers.
According to RWA.xyz, the total value of tokenized U.S. equities across public blockchains was approximately $1.85 billion as of early July 2026, while CoinGecko reported a figure closer to $487 million at the end of the first quarter. Alpaca's self-reported $1.5 billion in custody covers only shares backing live tokenized assets, not its broader brokerage business. The discrepancy between trackers highlights the lack of standardized measurement in the sector and the challenges of verifying market concentration claims.
Tokenization of real-world assets, including equities, is often described as a way to democratize access and streamline settlement. But the legal and operational structure matters: most tokenized stocks today do not confer direct ownership, voting rights, or dividend entitlements to holders. Instead, users rely on the solvency and integrity of the intermediary holding the underlying shares. As official infrastructure like DTCC's Tokenization Service comes online, the distinction between economic exposure and legal ownership will become increasingly important for investors, regulators, and platforms seeking to bridge traditional and blockchain-based markets.
