As everyone is talking about tokenized stocks, I can only encourage you to read this paper by @CampbellJAustin and @TuongvyLe12 about "Crypto and the Evolution of the Capital Markets". As someone building at the intersection of crypto and tradfi for many years at @FairmintCo, I can say this is one of the best paper ever published on the topic. Everyone talks about "tokenizing securities" but few truly understand that crypto fixes the market plumbing, not just the assets! A thread...

The capital markets we know today were never designed for efficiency. They were kludged together in the 1970s to solve the “paperwork crisis” caused by paper stock certificates and back-office chaos.

To fix the chaos, regulators created intermediaries: → brokers → clearinghouses → custodians → transfer agents → DTCC / NSCC / Cede & Co. Each layer solved a legacy problem… while adding fees, friction, and opacity!

One of my favorite quote from the paper: “If blockchain had existed in the 1960s, the entire structure of our capital markets might look very different today.”💯

In the 70s, a decentralized model for dematerializing stock certificates was even proposed! It was called the "Transfer Agent Depository" model but was seen as an "utopian solution" at the time... and probably rightly so!

Blockchain collapses the entire securities stack 🔥 Execution, clearing, settlement, custody: done atomically in one P2P transaction, enforced by smart contract. No rent-seeking middlemen. No T+1 delays. No indirect ownership.

DeFi is not just "alternative finance". It’s better plumbing. * Instant settlement * Transparent ledger * Disintermediated access * Programmable compliance * Lower systemic risk

The central thesis of the paper can be TL;DR as: "Instead of trying to retrofit old rules onto new tech, we need a framework that preserves blockchain’s core benefits while addressing its unique challenges."

I love that they also recognized that even CEX (centralized crypto exchanges) are a step-function improvement: * Users access orderbooks directly (no broker needed) * Internal settlement is instant * Withdrawal = real ownership * 24/7 markets

Meanwhile, traditional markets: * Still rely on DTCC, NSCC, and “Cede & Co.” * Prevent retail from owning directly * Create systemic risk via central intermediaries * Obscure true ownership and execution quality

Another great quote: "What was supposed to be an ‘interim step’ on the way to a ‘certificateless society’ became the permanent basis of U.S. securities settlement." This is the tragedy of 20th century capital markets. Crypto offers a reset!

You can read the full paper here: Props to @TuongvyLe12 and @CampbellJAustin for a fantastic paper on what crypto will bring to capital markets, I hope everyone at the @SECGov crypto task force reads it! cc @HesterPeirce