Alpaca Dominates Tokenized Stocks Market with 85.8% Custody Share
Alpaca, a California-based broker-dealer, has emerged as a dominant player in the tokenized stocks market, holding 85.8% of the underlying shares as their custodian. This figure highlights the growing interest in tokenized stocks, which are attracting major exchanges and brokerages, including Binance, Robinhood, and Coinbase.
Market Share and Clientele
According to data from Token Terminal, Alpaca accounts for 83.5% of the tokenized stock market capitalization as of October 2026. However, Alpaca's self-reported figure from July 2026 claims it holds approximately 94% of the tokenized US stocks and ETFs market, backed by over $1.5 billion in real shares. The company services more than 10 issuers and platforms, including Ondo, xStocks, and Binance bStocks.
Operational Role and Risks
Alpaca's responsibilities extend beyond mere storage; it facilitates real-time minting and redemption of tokens, ensuring that token holders experience corporate actions such as dividends and stock splits. While this provides reassurance to traders that their tokens are linked to real shares, it also raises concerns about concentration risk. If Alpaca encounters operational issues, it could impact multiple platforms simultaneously, affecting users trading on major exchanges.
Tokenized Stocks Landscape
Currently, collateralized tokens represent 86.5% of the tokenized stock market, with issuer-sponsored shares making up only 6.5%. This concentration reflects the practical advantages of using a single custodian for custody, settlement, and corporate actions. As the market continues to grow, with an estimated value between $3.5 billion and $3.8 billion, the number of holders has surged to between 3.77 million and 5.3 million, representing a significant portion of on-chain real-world asset holders.
Future Considerations
For investors, the dominance of Alpaca in the tokenized stock market serves as a reminder to understand the implications of custody concentration. As demand for tokenized equities increases, the key questions will revolve around whether rival custodians can capture market share and how regulatory scrutiny might evolve in response to this concentration.
Updated 17:01 UTC
New Insights on Tokenized Stocks
- Gravity Team CEO Mārtiņš Beņķītis emphasizes that deeper liquidity and reliable redemption mechanisms are essential for tokenized stocks to support large trades.
- An October report from the International Monetary Fund (IMF) indicates that tokenized equities are significantly less liquid than traditional stocks, exhibiting approximately 1.5 times their realized volatility.
- Beņķītis highlights that the ability to create and redeem tokens against their underlying shares is critical for maintaining liquidity and minimizing price discrepancies.
- As of October 29, 2023, 38 publicly traded companies have objected to having their shares represented on the proposed tokenized stock venue OKXICE.
- Recent objections include major companies such as Walmart, Eli Lilly, and Carnival, following earlier objections from JPMorgan Chase and Coca-Cola.
- OKXICE aims to offer around-the-clock trading in tokenized US equities with stablecoin settlement, but issuer acceptance will significantly influence its expansion potential.
Updated 17:01 UTC
New Developments in Tokenized Stocks
Coinbase-issued tokenized stocks on Base have surpassed $4 billion in cumulative trading volume on decentralized exchanges shortly after their launch.
The launch occurred on August 24, 2026, with tokenized versions of major US equities, utilizing the B20 token standard.
Each token is backed 1:1 by real shares held in regulated custody, ensuring that every token corresponds to an actual share.
Significant trading activity has been observed, with Aerodrome capturing between 76% and 98% of trading volume during key periods.
Over $260 million worth of tokenized stocks has been deposited into DeFi protocols like Aave.
Issuance of these tokenized stocks is restricted to non-US persons, with custody arrangements regulated under Abu Dhabi regulations.
FAQ
What percentage of the tokenized stocks market does Alpaca control?
Alpaca controls 85.8% of the underlying shares as their custodian and accounts for 83.5% of the tokenized stock market capitalization as of October 2026.
What are the main responsibilities of Alpaca in the tokenized stocks market?
Alpaca's responsibilities include facilitating real-time minting and redemption of tokens, as well as ensuring that token holders experience corporate actions such as dividends and stock splits.
What is the market value of the tokenized stocks market?
The estimated value of the tokenized stocks market is between $3.5 billion and $3.8 billion.
What risks are associated with Alpaca's dominance in the tokenized stocks market?
The concentration of custody with Alpaca raises concerns about concentration risk; if Alpaca encounters operational issues, it could impact multiple platforms simultaneously, affecting users trading on major exchanges.
How many holders are there in the tokenized stocks market?
The number of holders in the tokenized stocks market has surged to between 3.77 million and 5.3 million, representing a significant portion of on-chain real-world asset holders.
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