Alpaca’s Instant Tokenization Network could boost tokenized US stock liquidity, echoing SEC in-kind moves for Bitcoin ETFs

• Instant in‑kind minting and redemption for tokenized US stocks.

• Single API call to tokenize portfolios and redeem tokens without cash settlement delays.

• The tokenized stock market exceeds $700 million; broader tokenization represents over $31 billion onchain.

Instant Tokenization Network: Alpaca’s ITN enables institutions to mint and redeem tokenized US stocks in‑kind, 24/7. Explore why this matters for onchain liquidity.

What is the Instant Tokenization Network?

The Instant Tokenization Network (ITN) is Alpaca’s platform that enables US‑regulated financial institutions to convert portfolios into tokenized US stocks and redeem tokens back into the underlying shares in‑kind. The service offers a single API workflow and 24/7 operational access to speed settlement and improve liquidity.

How does Alpaca’s ITN enable in‑kind redemptions?

Alpaca’s ITN journals securities between brokerage accounts and delivers tokens to an issuer’s Authorized Participant. Institutions can exchange tokens directly for the underlying shares without first converting to cash. This removes typical settlement windows and aligns tokenized stock mechanics with in‑kind ETF creation/redemption models.

The Instant Tokenization Network allows institutions to mint and redeem tokenized US stocks with in‑kind settlement and 24/7 access.

US broker‑dealer Alpaca has launched the Instant Tokenization Network (ITN) to let institutions mint and redeem tokenized US stocks directly. The platform targets structural frictions that have limited liquidity in the tokenized equities segment.

The ITN provides a single API call to tokenize portfolios and supports in‑kind redemptions, enabling institutions to receive the underlying shares when redeeming tokens. The network operates outside traditional market hours, offering continuous access to token issuance and redemption.

The tokenized stock market is currently valued at more than $700 million. Source: RWA.xyz

By enabling in‑kind settlement — swapping tokens for the actual securities rather than cash — Alpaca aims to reduce settlement overhead and enhance market efficiency. The approach mirrors in‑kind practices recently approved by regulators for some cryptocurrency exchange‑traded products.

Alpaca said the ITN is available to US‑regulated financial institutions and is designed to integrate with custodial and broker‑dealer workflows. Arush Sehgal, Alpaca’s head of crypto, described the ITN as a two‑step API process focusing on journaling securities and delivering tokens to an Authorized Participant.

“ITN’s process is best understood as a single API that enables two functions,” Arush Sehgal, Alpaca’s head of crypto, said in a company statement. “First, the journaling of securities to and from brokerage accounts for US‑regulated institutions. Second, delivery of tokens by the issuer to their Authorized Participant.”

Alpaca has provided infrastructure for prior tokenization initiatives, including platforms that tokenize stocks and ETFs. The company’s new network extends that work to support fully in‑kind token life cycles.

Rob Hadick speaking on the sidelines of TOKEN2049. Source: Andrew Fenton/Cointelegraph

Why does in‑kind redemption matter for tokenized stocks?

In‑kind redemption reduces counterparty and liquidity risk by ensuring token holders can obtain the underlying shares directly. This mechanism shortens settlement chains and can increase tradability of tokenized equities onchain. Regulators and industry participants have highlighted in‑kind processes as key to scaling tokenized financial products.

How big is the tokenization opportunity?

Tokenization of real‑world assets has become a major trend in 2025, with industry data showing more than $31 billion represented onchain. The tokenized stock market alone is estimated at over $700 million. These figures signal growing institutional interest but also underscore the need for operational innovations like ITN to deepen liquidity.

Frequently Asked Questions

Is ITN restricted to US stocks only?

Alpaca’s ITN is designed for tokenization of US‑listed equities and currently available to US‑regulated institutions. Expansion to other asset types would depend on regulatory and operational factors.

How quickly can tokens be minted and redeemed?

The ITN uses a single API to initiate minting or redemption and offers 24/7 access. In‑kind redemption bypasses standard cash settlement windows, speeding the overall process.

Key Takeaways

• Operational efficiency: ITN provides a single API for minting and in‑kind redemption to reduce settlement friction.
• Liquidity impact: In‑kind processes aim to improve tradability of tokenized stocks and align with recent regulatory precedents.
• Institutional focus: The network is offered to US‑regulated institutions, emphasizing custody, compliance and control over execution environments.

Conclusion

The Instant Tokenization Network represents a practical step toward scalable tokenized equities by combining in‑kind settlement, a streamlined API, and 24/7 operations. As tokenization grows beyond $31 billion onchain, ITN’s model could help bridge TradFi requirements and onchain liquidity — a development institutions will watch closely.