🍂Kick'em When They’re Down; Kick that Dirty Laundry🧦
The SEC is reportedly developing a plan to let tokenized stocks trade on blockchain, and the reason is both predictable and slightly absurd: traditional financial institutions want to trade around the clock. They've been pushing the regulator to greenlight always-open markets, because apparently waiting for market hours is so 2019.
But here's where it gets interesting: While everyone assumed tokenized stocks would be a massive windfall for the digital assets industry—particularly for networks like Ethereum—Dragonfly partner Rob Hadick is pouring cold water on that narrative. According to him, this whole thing might benefit traditional finance far more than it benefits cryptocurrency. The institutions want 24/7 trading and better economics, sure, but they don't actually want to play in the blockchain sandbox.
Here's the part that should make anyone following SEC drama sit up straight: institutions don't want to share. Companies like Robinhood and Stripe are building their own blockchains rather than using existing infrastructure. They don't want to share block space with memecoins. They don't want to share economics. They want control over privacy, validators, and their entire execution environment.
And this creates what Hadick calls "leakage." Even if these tokenized stocks use layer-2 networks, the value may not flow back to Ethereum or the broader crypto ecosystem the way optimists predicted. If institutions build their own layer-1 blockchains instead, it becomes even murkier how any of this benefits the digital currency world that already exists.
Think about that for a moment: Wall Street wants the technology that cryptocurrency pioneered—the 24/7 trading, the blockchain settlement, the programmability—but they want it on their terms, in their walled gardens, with their rules. It's like demanding all the benefits of a public park while insisting on building a private one next door with a velvet rope.
The real comedy here is watching the SEC navigate this. They've spent years treating digital assets with extreme skepticism, creating enforcement actions, and generally acting like blockchain technology is somewhere between a casino and a financial crime scene. Now those same traditional institutions the SEC is comfortable with are asking permission to use the exact same technology—just on their own private chains where they maintain control. Good luck.
Major exchanges like the NYSE and Nasdaq are actively meeting with the SEC about tokenized equities. Nasdaq even filed for a rule change in September to allow listing and trading of tokenized stocks. The market for tokenized stocks is still tiny—just $735 million according to RWA.xyz—but the momentum is building.
What we're witnessing is institutions cherry-picking the convenient parts of blockchain technology while avoiding the parts that made cryptocurrency revolutionary in the first place: permissionless access, decentralization, and shared infrastructure. They want hybrid chains with company control but optional permissionlessness.
This isn't quite the future that digital currency advocates envisioned, but it might be the future we're getting. Traditional finance gets its 24/7 trading. The blockchain gets... well, that part's still unclear.
