Infrastructure, Not Ideas, Is What’s Blocking Global Tokenized Markets

The tokenization of stocks, bonds and real-world assets is no longer merely theoretical: issuers, custodians and pilot programs have demonstrated minting, custody and on-chain transfer at scale. Yet the underlying execution and settlement infrastructure remains the gating factor for institutional adoption. Three technical failings are especially consequential — inadequate sustained transaction throughput, latency and uncertain finality that undermine price discovery, and transaction-ordering primitives that enable extractable-value extraction — and these collectively prevent markets from offering the predictability trading desks require. Real-world behavior now amplifies those weaknesses: well-capitalized trading firms and their technical affiliates are investing in validators, sequencers, private networking and high-performance clients to influence ordering and propagation, recreating latency and co‑location advantages onchain. Economic returns are also shifting away from base-layer consensus toward middleware and front-end actors — stablecoin issuers, custody providers, wallets and bridge operators are capturing an outsized share of fees and distribution, increasing lock-in and concentration risk. Cross-chain messaging stacks and bridges have become de facto gatekeepers for interoperability, raising security and regulatory exposure as liquidity centrates around a few routing providers. Regulators and major market participants are aware: efforts to tokenize equities and shorten settlement windows (as proposed by some broker-dealers) have drawn scrutiny from the SEC, which emphasizes harmonized rulemaking and comparable surveillance and custody standards. At the same time, institutional product work — restaking stacks, custody-integrated yield, and stablecoin settlement rails — shows capital is being readied for on-chain deployment once operational and compliance requirements align. The practical implication is a bifurcated near-term topology: retail and experimental activity will persist on public chains, while high-volume, monetizable flows may concentrate on platform-led rails and middleware unless base layers are redesigned. Addressing these issues will require more than layering fixes; practical targets include sustained throughput orders of magnitude above today’s averages, sub-second finality, and protocol mechanisms that neutralize ordering rent extraction while preserving auditable neutrality. Specialized execution layers compatible with popular virtual machines and stronger cross-chain primitives can help preserve developer momentum, but the industry must choose foundational redesign and coordinated governance rather than ad hoc middleware dominance. Absent those changes, large institutional pools will either abstain or build private controlled rails, constraining the total addressable market for open tokenized finance.