Alpaca Custodies 94% of Tokenized Stocks Market — Crypto’s Broker-Killer Relies on a Single Broker

Alpaca Finance custodies more than $1.5 billion in shares backing tokenized equities. That’s 94% of the entire market. Public trackers confirm it. A sharp contradiction? Absolutely. Crypto’s pitch was to eliminate the broker—instead, it built its equity-token infrastructure around one. (CryptoSlate)

Tokenized stocks were straightforward on paper. Blockchain-native tokens representing real shares promised around-the-clock trading across borders without layered fees, settlement delays, or institutional gatekeeping. Disintermediation wasn’t a side benefit. It was the core value proposition—the reason tokenized equities were supposed to matter at all. That thesis is now being tested. Not by a regulatory crackdown. Not by a smart contract exploit. By the market’s own structural choices.

How Alpaca Became the Backbone

Alpaca Finance operates as a broker-dealer. Token issuers needing a regulated entity to hold the actual underlying shares have turned to the firm at scale. The company says it now custodies that colossal $1.5 billion. The custody gap was real—someone must hold the stock, and that someone must be regulated. Alpaca filled it. Filled it so completely that roughly 94% of the tokenized equities market runs through a single custodian. That concentration reintroduces exactly the kind of regulated financial intermediary these platforms claimed to bypass. It also creates a single point of failure: if Alpaca’s custody operation falters, the vast majority of tokenized stock positions stand exposed to the very custodian risk the token model was supposed to eliminate.

The SEC’s Warning

The SEC has flagged this structural vulnerability directly. The regulator’s concern centers on the layered intermediary structure third-party stock tokens create. Token holders may lack direct legal ownership of the underlying shares. That means the blockchain representation and the legal title can diverge. When they do, the token holder is at the back of the line. The SEC warns these arrangements expose investors to ownership and intermediary risks absent from conventional brokerage holdings. The token wrapper adds a layer rather than removing one—every point where legal title, beneficial ownership, and token redemption rights can split apart introduces additional counterparty exposure.

The DTCC Enters the Arena

Then there’s October. The Depository Trust & Clearing Corporation—the DTCC, the U.S. securities settlement backbone—prepares to launch its own tokenization service then. Putting traditional financial infrastructure directly into a space built to circumvent it. The question it raises? One broker-backed token issuers cannot easily answer: if the DTCC tokenizes equities on its own rails, does the Alpaca custody model become redundant, or does it become the validated template? The DTCC’s entry could cut token issuers out of the custody chain entirely. Or it could legitimize the broker-backed approach by showing legacy infrastructure players see tokenization as inevitable. Either way, a DTCC product going live before year-end reshapes competitive dynamics fast.

Broader RWA Context

The broader real-world asset tokenization sector is scaling quickly, making these questions urgent. Tokenized RWAs recently claimed 52% of weekly volume on HHYPE$59.69▲2.69%—a milestone signaling the category is shifting from experiment to infrastructure. (CoinTelegraph) The total crypto market cap sits at $2,305.63 billion. The Fear & Greed Index at 26 out of 100—squarely Fear territory. Investors aren’t in a speculative mood. In that environment, opaque custody arrangements in a nascent product category are harder to wave away.

The Bottom Line

The 94% figure is the story. Tokenization, so far, has centralized around one custodian rather than distributing ownership. The contradiction isn’t abstract. It’s a measurable concentration of risk in a market built on the promise of dispersion. The sector’s growth shows demand is real. Demand does not resolve structural dependency.

Three forces could shift that concentration: the DTCC’s October launch, continued SEC scrutiny of intermediary-layered token structures, and the emergence of competing custodians willing to hold underlying shares for token issuers. Until then, the tokenized equities market runs through one door. The next test arrives in October. That’s when the DTCC’s tokenization service is scheduled to go live.