The Tokenization of Everything

Welcome to Fintech Brainfood, the weekly deep dive into Fintech news, events, and analysis. You can subscribe by hitting the button below, and you can get in touch by hitting reply to the email (or subscribing then replying)

Want to support Fintech Brainfood? Get yourself to Fintech Nerdcon in Miami, or check out the work we do at Sardine*.

Here's this week's Brainfood in summary

📣 Rant: The Tokenization of Everything

💸 4 Fintech Companies:

1. Handwave - The Palm Payment Company

2. Merso - BNPL for Gamers and Digital Assets

3. Ceedar - The Bookeeping AI for Canada 🇨🇦

4. Flyhomes - “Buy before you sell” for homes

👀 Things to Know:

1. Shopify’s new tools for Agentic Commerce a hint at what’s coming.

2. Ripple to Acquire Stablecoin Platform Rail in a bid to own B2B stablecoin payments

3. Paxos pays $48.5m settlement to NYDFS over Binance-related AML failings

📚 Good Read: The $115m SBA Fraud - Nobody is talking about

Weekly Rant 📣

The Tokenization of Everything 

It can be tempting to view this as a CEO hyping up their stock. However, I believe Vlad is documenting a shift that is really happening. 

As Blockworks noted.

Figma is a design SaaS company, not some Crypto hyping treasury company. So it’s interesting that it felt the need to ready itself for equity tokens.

The last big shift of the entire industry was the digitization boom in the 1970s. At the time we had a back-office paperwork crisis. A wave of M&A activity led to the NYSE closing on consecutive Wednesdays just to catch up with the paper stock changes.  Digitization started as a solution to a problem but then unlocked new innovations like the central limit order book that powers the world's largest stock exchanges and quadrillions of dollars in economic activity.

In 2025, financial markets face a new set of problems, which will be resolved through turning assets recorded in accounting systems into tokens. In turn, this will be unlocked by a new market structure bill currently working its way through the Senate called the CLARITY Act. 

Just as GENIUS was an inflection point for institutional stablecoin adoption, CLARITY will begin the tokenization of everything. 

The 1970s Paperwork Crisis and Parallels to Today

In the 1960s, a wave of corporate mergers swept the US as companies built massive portfolios of unrelated businesses. The NYSE couldn’t cope with the volume BBH explains

This led to a process of digitization of financial markets in the 1970s, as my favorite finance historian Marc Ruby explains:

These accounting records are then stored at Centralized Securities Depositories (CSDs) like the Depository Trust Clearing Company (DTCC), Clearstream or Euroclear. This history of “immobilising” and dematerializing securities is well understood by financial markets pro’s, but it's the perfect metaphor for Tokenization. 

The Problems with Markets Today:

Figma's founders watched their company get valued at $16 billion on IPO day. By close, it was worth $47 billion. The banks pocketed the $31 billion difference. There’s a lot of pressure put on CEO’s to agree to the investment bankers' pricing arrangement, but that leaves money on the table for anyone who sells at IPO. Famed investor Bill Gurley has been calling this out for a decade or more:

The best growth companies are staying private, meaning retail loses out. SpaceX, OpenAI, Anthropic, Stripe, Ramp, and many multi-billion-dollar companies are doing all of their growth in private markets.

Disclosures aren’t working as an investor protection. Public markets are supposed to help consumers make informed investment choices through disclosures like quarterly earnings and filings with regulators like the SEC. In practice, this doesn’t work. Most consumers can’t read an earnings report.

Cut-off times and T+1 can build risks up over weekends. Markets are open during office hours. Since the birth of the internet, consumers and businesses didn’t need to be in an office to trade. This can create massive risks like during the Gamestock and memestock crisis of 2021, as Robinhood experienced first hand.

Legacy systems create cost, friction, and unfilled demand. What was cutting-edge in the 1970s and even 1990s is today slow and expensive. That cost gets passed on to customers in higher fees. That locks out segments and geographies from financial markets.

I’ve focused on stocks so far, but tokenization applies to many other asset classes, especially private markets (like private credit, equity, real estate), which don’t even have the central depositories that stock markets do. 

If you can tokenize it, it becomes instant, 24/7, and global. That’s why Robinhood launched Tokenized stocks in Europe.

How Robinhood’s tokenization works

Robinhood announced it is launching tokenized stocks in Europe at a very flashy reveal in Cannes. 

The goal is to let European investors trade traditional investments that can be traded (and settled) 24 hours a day, with a few advantages vs traditional stock markets.

1. It’s available 24 hours, 5 days a week, better aligned to their trading day than US hours

2. Settlement is instant vs traditional markets that are T+1 (a fancy way of saying the next working day)

3. In the future, users can self-custody, allowing them to interact with fancy DeFi protocols and use 3rd party products.

Robinhood isn’t Tokenizing the stock certificate, it’s buying it, and giving you a token that tracks the price. 

The accounting record still exists at the DTCC; it just happens Robinhood is now the owner.

1. Customer places an order

2. Robinhood buys a share from established venues, held in custody. 

3. Robinhood “mints” into a blockchain token that represents exposure to that share 

When the customer sells, the process reverses: 

1. The underlying share is sold, 

2. The token is “burned,” and proceeds are delivered. 

As Marc Ruby explains

An aside on tokenization: Minting, burning, tokens all sound confusing. Digital assets are represented by tokens on a blockchain network. The act of creating new tokens is called minting (this is what Circle does when it creates new USDC for example). Then, when a user wants to sell their token, it can be redeemed for cash, and the underlying token is burned (destroyed). Why do all of this? Because it all happens instantly, 24/7, globally. Unlike traditional accounting systems, which need to be synchronized, and move at the pace of the slowest market actor.

Robinhood is also tokenizing private stock. 

With companies like Open AI, Stripe & SpaceX far away from public markets, Robinhood can give access to the price movements without the complexity of secondary markets. This made OpenAI very unhappy.

What Robinhood did points at one future approach. What we don’t know is what will be the approach.

• Will we list stock certificates directly onchain? 

• Will other assets come directly onchain or be wrapped in funds (like treasuries are today)?

• Will this fix settlement time issues or just create new pinchpoints?

There’s a lot of hype and a lot of momentum since the Robinhood announcement, but there’s a real lack of clarity. But the SEC and the Senate seem determined to fix that with new policy and laws. 

Project Crypto and CLARITY - The Regulatory Unlock

For the past decade, the the big financial institutions have been shy about entering onchain markets. In part, because the technology was work in progress, but in much larger part, because the regulators were explicitly sending warning signals not to engage. That is changing rapidly.

Project Crypto.

Last week the SEC Chair Paul Atkins gave a speech on the so-called “Project Crypto” which was staggering in its ambition. Its goals are:

1. Bring token distributions onshore. New token launches would often use offshore legal structures and foundations, “decentralization theatre”. The goal is to have them incorporate and operate legally in the US. This also includes relief for firms tokenizing existing securities to bring activity onshore. So if Figma wanted to tokenize its stock, it could do so without action from the SEC.

2. Clear rules defining what is not a security. The Chair gives the example of car titles (blockchains can record anything after all). Alternative assets like private credit, equity, and even wine are widely traded in financial markets, rarely tokenized at scale. This clarity could help bring more onchain. The goal is to avoid the prior issue where you’d only find out if you got a Wells Notice from the SEC. 

3. Those that are securities will get a streamlined registration process. Being a security is not a bad thing; ideally, that should be fully regulated and transparent. Staff will also propose disclosure standards for ICOs and other token offerings. This is designed to ensure investors can make informed decisions, even if something is early and not yet fully regulated.

4. New licence regime to list crypto, securities, and other assets (for super apps). If you’re Robinhood you might need 4 or 5 different licences to do that today. This follows the idea where banks are exempted from multiple duplicative requirements because they’re a bank.

5. Onchain software (Defi Protocols) should be explicitly permitted. Meaning Aave, Hyperliquid, and Uniswap should be available without creating some central intermediary to fit existing regulation. Developers will be protected as software developers, and onchain software will be enabled through exemptions to Reg NMLS.

This is all within a principles-led approach to innovation. If you’re building something new, the SEC will require you to make periodic reports to the SEC, or create “verified pool” capabilities to whitelist securities tokens from others.

To say that’s a change of posture for financial markets is an understatement. The problem here for many market participants will be, we’ve had one pro crypto Trump administration, followed by a very anti crypto Biden administration. This needs to be law. 

Handily, the next major financial services bill to pass will most likely be the CLARITY Act.

The CLARITY Act.

The Digital Asset Market Clarity Act of 2025 (CLARITY Act) passed the House with bipartisan support (294-134) in July, with a current goal to reconcile with a Senate draft in Q4 of 2025. The implementation from then is 270 days.

Key Takeaways:

• Regulatory Clarity: Establishes definitive SEC and CFTC jurisdictional boundaries for the first time

• Market Structure: Creates three distinct asset categories with tailored regulatory frameworks

• Implementation Timeline: 270-day implementation period for regulatory agencies

Possibly the most interesting thing for banks is that the bill amends the Bank Holding Company Act to allow financial holding companies to conduct digital commodities activities, meaning banks could directly custody digital commodities (e.g., Bitcoin).

The CLARITY Act will change between now and the President's desk, but if it stays within the same zip code, it means we’ll have a permanent shift to the regulatory perimeter with digital assets, digital commodities, token launches, and onchain finance all a major piece of that.

This clarity is welcome, but it won’t fix everything, nor will it be the best answer for everything. For a time, the two systems will run side by side, just as paper did with digital systems. It could take a decade or more for that to shift.

​​Tokenization won't solve every problem (see 🤓 Extra Credit for the full nuance), but it will fundamentally change how markets work.

All Assets will be Tokenized

Imagine buying a house in London while sitting in New York. The deed, the mortgage, the insurance - all tokenized, all settled instantly. No wire transfers, no waiting for banks to open, no correspondent banking delays. 

That becomes possible when every asset is a token.

It fixes the plumbing in powerful ways. 

Technically, there are separate protocols and workflows at play if you assume it happened in one trade.

• The FIX Protocol is used to communicate securities or FX information. Each party has dedicated back office systems that handle orders, reconciliation, and routing.

• Then SWIFT is used to communicate payment and settlement information. Again, different systems of record are used to record cash.

Off-chain, that’s all slow, often batch, and reconciled with spreadsheets.

Onchain, that’s one transaction.

In turn, this opens new segments, geographies, and product opportunities. 

When you reduce complexity:

• Everything becomes lower cost to operate

• Workflows become automated across multiple assets

• This opens up new market and product opportunities

Reducing costs means customer segments that were priced out (like the global south) become a giant new market opportunity. Or smaller trading firms can now compete on equal footing to giants without heavy fixed infrastructure investment.

Regulation is coming, which means the big institutions have an opportunity to adopt the technology, open new markets, and transform how they operate. 

But there’s also a window for Fintech companies to drive product expansion beyond being a Neobank into being more of a super app.

So Vlad is right.

Tokenization is the greatest innovation in decades.

Your mortgage, your stock portfolio, your savings account - they'll all live on the same rails. Instant, global, 24/7. The infrastructure is being built now. The regulation is clearing the path. The only question left is: will you be ready when everything changes?

ST.

🤓 EXTRA CREDIT: Want to go deeper on the tradeoffs Tokenization presents? Check out this doc that didn’t make it into this weeks Rant.

4 Fintech Companies 💸

1. Handwave - The Palm Payment Company

Handwave helps merchants accept in-person payments with a palm “hand wave.” On applications, merchants receive a scanning device that connects to their Point of Sale (POS). It claims to have in built age verification and fraud prevention (thanks to palm geometry, vein patterns, and liveness detection). It also helps combine payment, loyalty and security into a single palm wave. 

🧠This is low friction at POS, but high friction at start-up. How do you solve the cold start problem for onboarding? Waving my hand combines all of the cards in my wallet, or Apple Pay, into a single motion. It’s also very hard to fake being alive and having my hand, in-person. This is a proprietary, full-stack solution, and the investors skew Baltics / Poland, where cash is still a major payment type. Perhaps the goal here is a compelling alternative to cash not cards. That said, with the right distribution partners this could do amazing things. The physical, in-store experience needs something more secure, and more human in the age of AI.

2. Merso - BNPL for Gamers and Digital Assets

Merso lets game developers in fiat or web3 sell assets and have consumers pay for them in installments. Their liquidity product lets gamers use assets they’ve financed as collateral to buy new assets. It can be integrated with a few lines of code.

🧠 This screams HIGH RISK. Lending to high-risk sectors is subject to high fraud and money laundering. Ooof. BNPL for over-priced video game loot feels like exactly what’s wrong with the video gaming world in 2025. I’m a believer BNPL is a net-positive and love video games so much I themed a whole fintech conference around it. But my word. There’s a steelman case here, where gamers in low-income populations can now access things they couldn’t before and manage their hobby with better cashflow. But the way these products are stacked just sends all the wrong messages. Probably a great business opportunity. But, the optics here are all wrong.

3. Ceedar - The Bookeeping AI for Canada 🇨🇦

Ceedar uses AI to categorize receipts, invoices and documents. It helps identify counterparties and automates reconciliation. Over this, it can give a real-time cash flow, owner-friendly reports, and deadline reminders. It integrates with platforms like Stripe and Wise with more coming soon. 

🧠A whole new tax code means a whole new accountancy practice. Canada’s start-up scene is bustling, especially in Fintech. It’s not surprising that many categories we see in the US are spreading North. What’s interesting here is the sheer volume of companies that operate across North America that could benefit from this too. They cite future integrations with platforms like Ramp (for example), that would help those operating in both places. 

4. Flyhomes - “Buy before you sell” for homes

Flyhomes helps people who have to move quickly or are struggling to shift their property in a slow market to unlock liquidity to complete their move. Flyhomes underwrites income, property value, and a stock portfolio for pre-approvals to unlock a down payment on a new home. This model also helps downsizers or people who need guaranteed backup contracts enabling them to quality for new mortgages even if they have home payments on an existing property not yet sold.

🧠This gives loan officers many more tools to unlock stuck buyers. Every use case sales pitch is “close more deals.” Adding debt to a debt product feels like it could go very wrong, but the platform has some helpful calculators. Even with high rates, people still need to move, and solutions that can unlock this need are definitely warranted, especially given the still-high home prices. 

Things to know 👀

1. Shopify’s new tools for Agentic Commerce are a hint at what’s coming.

Shopify announced the launch of three new tools for developers of Agentic Commerce and AI Agents. Shopify Catalogue is a universal product search across its millions of merchants that returns a consistent, unique product identifier. Checkout kit is a set of widgets and UI components available via MCP servers to display those products. Universal Cart is a single checkout for any product, from any Shopify merchant.

🧠 What problem does this solve? Today to add shopping to your AI Agents you have to:

• Search for products on the internet (slow, sometimes blocked!)

• Create a UI to display those products

• Manage user trust and security in your UI (e.g. build your own checkout.

🧠 The early solutions don’t solve the whole problem. Stripe and PayPal have checkout and cart SDKs, Visa and Mastercard have announced their coming standards for agents to have trusted tokens. Companies like Perplexity are doing all of the hard work in UI to build it themselves. But its the experience is slow and filled with hidden friction points. It’s not 10x better than e-commerce. That’s why despite the hype, Agentic Commerce volume is still tiny.

🧠 When you combine Shopify’s tools, you solve some of these problems. Instead of crawling the web for products, use the Shopify catalogue. Instead of building your own UI, use their checkout kit.  Instead of building your own cart and trying to fill it with the products you found from multiple merchants and manage all the shipping complexity, use theirs.

🧠 There are big conversion wins coming for Agentic commerce. Microsoft Co-pilot says there’s 12.3% conversion for AI-assisted shopping vs 3.1% without agents (!!). If that delta holds, every merchant will want AI-assisted shopping to be available from their store. ASAP.

2. Ripple to Acquire Stablecoin Platform Rail in a bid to own B2B stablecoin payments

The press release says Rail controlled 10% of ALL global B2B stablecoin flows ($3.6 billion moving through their pipes annually, growing 400% YoY.

🧠 At a marginal take rate, that acquisition would seem like a big multiple. Unless Ripple believables stablecoin payments are about to explode.

🧠 Ripple is set up to be a payments monster: 60+ licenses, A partnership with MoneyGram, Plus Rail's infrastructure potentially unlocking B2B flows and their own stablecoin with RLUSD.

🧠 Having missed out on acquiring Circle pre-IPO, this is an interesting play. Will they buy anyone else? Will we see more stablecoin M&A? I think H2 2025 is about to get wild in stablecoin land.

3. Paxos pays $48.5m settlement to NYDFS over Binance-related AML failings

Paxos will pay a $26.5m penalty and has committed $22m to improve its compliance program. Between 2017 and 2021, $1.6 billion flowed into sanctioned entities through Binance after OFAC had sanctioned them. For context, Paxos used to be the operator of Binance’s stablecoin BUSD.

🧠The regulator specifically called out the importance of Third Party Risk Management. Paxos has historically been one of the more transparent, highly licenced and regulated institutions, but its partner became the issue. Remind you of the banks and BaaS?

🧠This is a timely reminder that while federal regulators are more open, state regulators may continue to pressure firms. The GENIUS Act and CLARITY create clear rules, but there are consequences for failure in all of them.

Good Reads 📚

1. The $115m SBA Fraud - Nobody is talking about

Several banks extended loans under the SBA’s 7(a) program to “investors” in “WaterStation” that collapsed into bankruptcy and is alleged to have been a ponzi scheme. The company appears to have taken over $270m in total, and “investors” took out loans (including SBA 7(a)) to fund those “investments.” 

This water vending machine manufacturing company, eventually settling on a franchise model, with many franchisee’s turning to SBA-backed loans. The company would help those franchisee’s prepare their SBA paperwork, and one tiny bank ($443m asset Unibank) originated some 43% of those loans.

🧠Ponzi schemes can hide in plain sight. What looks like a company, with operating income and a franchise model can look fine on paper, until you interrogate it a layer deeper.

🧠Surely this is a use case for AI. Finding those risk needles in company paperwork haystacks. There are lots of folks trying to modernize credit with better workflows and AI, but so many banks are still manual and paper based.

🧠The alleged “collusion” here of small banks is troubling. If true, no matter how good the AI or oversight, this would still have happened. It goes to show, no matter how regulated you think a company category is, internal fraud is still a huge risk.

Tweets of the week 🕊

That's all, folks. 👋

Remember, if you're enjoying this content, please do tell all your fintech friends to check it out and hit the subscribe button :)

Want more? I also run the Tokenized podcast and newsletter.

(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

(2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a *. None of the above constitutes investment advice, and you should seek independent advice before making any investment decisions.

(3) Any companies mentioned are top of mind and used for illustrative purposes only.

(4) A team of researchers has not rigorously fact-checked this. Please don't take it as gospel—strong opinions weakly held

(5) Citations may be missing, and I’ve done my best to cite, but I will always aim to update and correct the live version where possible. If I cited you and got the referencing wrong, please reach out