Alpaca Controls 94% of Tokenized Stock Market with $1.5 Billion in Custody as Crypto Exchanges Enter Brokerage Space

Alpaca Securities dominates the tokenized equity market, custodying 94% of the $1.5 billion in underlying shares backing these assets. This high concentration introduces a single point of failure, drawing warnings from the SEC regarding third-party intermediary risks. The landscape faces disruption in October 2026 when the DTCC launches its official Tokenization Service, enabling direct tokenization of DTC-held securities with full shareholder rights. Meanwhile, crypto exchanges compete on liquidity, with Bitget's rTokens demonstrating superior depth and lower slippage.

Alpaca tokenized stock dominance

• ▪Alpaca Securities operates the Instant Tokenization Network to execute, clear, and run real-time minting and redemption of tokenized shares for partners including Binance, Kraken, Ondo, and Dinari.
• ▪Alpaca Securities raised $135 million in funding led by Peak XV, with debt from Payward and BMO bringing the total package to $435 million on July 16, 2026.
• ▪Alpaca Securities custodies over $1.5 billion in underlying shares backing tokenized equities, representing approximately 94% of the on-chain tokenized stock market.

Tokenized equity product structures

• ▪Bitget's Reality rTokens are backed by underlying securities held at Alpaca Securities, with independent reserve verification provided by The Network Firm.
• ▪Binance's bStocks represent BTech Holdings certificates over shares held at a regulated custodian, allowing conversion through Nest Trading and withdrawal to BNB Smart Chain.
• ▪The Depository Trust and Clearing Corporation plans to launch its own Tokenization Service in October 2026, allowing DTC-held securities to be issued directly as tokens.
• ▪Ondo Stocks are structured as secured Swiss-law structured notes issued through a bankruptcy-remote British Virgin Islands special purpose vehicle, with Ankura holding a first-priority security interest.
• ▪The Depository Trust and Clearing Corporation executed its first production tokenization trades on July 15, 2026, with over 30 firms including BlackRock, Goldman Sachs, and JPMorgan.

SEC tokenized securities classification

• ▪The United States Securities and Exchange Commission's taxonomy distinguishes between securities tokenized by or on behalf of the issuer and those tokenized by an unaffiliated third party.
• ▪The United States Securities and Exchange Commission issued a staff statement on January 28, 2026, warning that third-party tokenized securities can expose investors to additional ownership and intermediary risks.

Exchange executable liquidity comparison

• ▪In a market snapshot of NVDA, MSFT, META, and TSLA, Bitget's rTokens supplied the greatest balanced displayed depth within 25 and 50 basis points compared to Binance's bStocks and Gate's gStocks.
• ▪Bitget's rTokens produced the lowest median book-implied slippage for simulated order sizes of $1,000, $10,000, and $50,000 across NVDA, MSFT, META, and TSLA during the analyzed regular-hours window.

Corporate action dividend treatment

• ▪Bitget's Reality rTokens distribute net dividends separately in USDT, maintaining a one-to-one token-to-share ratio.
• ▪Binance's bStocks and Ondo Stocks reinvest dividends, which increases the token balance or the underlying share representation per token over time.

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