Tokenization has become the current thing

The narrative right now is that “tokenizing everything” — from public markets stocks to private market shares to T-bills — will be net good for both crypto and the world. To think about what’s happening in the market from a first principles approach, it’s helpful to go through:

1) how the current asset ownership system operates;

2) how tokenization would change that system;

3) why it’s even necessary in the first place; and

4) what “true dollars” are and how net new money is created.

Currently in the United States, large asset issuers (such as publicly traded equities) give custodial rights to their certificates to the DTCC. The DTCC then tracks ownership of the roughly 6,000 accounts that interact with it, who in turn manage their own ledger tracking ownership for their end users. For private companies, the model is slightly different: companies like Carta just manage the ledger for businesses…