June 26th, 2026

Wall Street May Embrace Tokenized Stocks, But Not on Public Blockchains

Many crypto enthusiasts dream of trading traditional equities around the clock on public blockchains. They imagine a decentralized utopia where anyone can buy fractional shares of major corporations without traditional brokers.

This vision fundamentally misunderstands how institutional finance operates. In my opinion, major tokenized stocks will never migrate to public networks. The future of twenty-four-hour equity trading belongs exclusively to private or semi-private blockchain architectures.

Regulatory Signals Fuel the Narrative

The United States Securities and Exchange Commission recently proposed rescinding two key rules under Regulation National Market System.

These rules require trades to be routed to the national best price and prohibit locked or crossed quotes across venues. Analysts like Alex Thorn note that automated market makers on public chains conflict with these requirements because they execute against isolated liquidity pools without checking off-chain quotes. Removing the rules could theoretically open the door to compliant on-chain trading of tokenized United States equities.

However, this remains a medium-term structural adjustment rather than an immediate green light. The proposal still faces a lengthy comment process, and platforms would still need to register as exchanges or alternative trading systems, satisfy clearing obligations, and ensure token holders retain voting and dividend rights.

Traditional market groups also warn that removing the rules could reduce price transparency and fragment markets.

Operational Constraints of Public Blockchains

Even with favorable regulations, public blockchains present significant operational hurdles for institutional equity trading. Gas fee volatility remains a primary deterrent. A surge in retail activity can congest public networks and sharply increase transaction costs.

Institutions cannot risk large equity settlements being delayed or becoming more expensive because of unrelated retail traffic. Traditional finance requires deterministic execution.

A bank executing a large block trade needs certainty around cost and settlement timing. Institutional traders require millisecond precision and reliable finality. Public networks prioritize openness and censorship resistance over the predictable throughput global capital markets demand.

Maximal Extractable Value (MEV) presents another critical barrier. Public blockchains broadcast pending transactions in a public mempool before execution. Sophisticated actors deploy bots to scan this information and front-run large orders by manipulating transaction ordering.

Billions of dollars have been extracted through these practices in recent years. This directly conflicts with the fiduciary obligations of traditional brokers and institutional mandates requiring best execution. Financial institutions are unlikely to embrace a system that permits such extraction from client order flow.

Privacy, Compliance, and Control Requirements

Privacy and compliance requirements further strengthen the case against public ledgers. Traditional finance operates under strict Know Your Customer and Anti-Money Laundering regulations.

Public blockchains expose transaction data to everyone. Institutions cannot broadcast their strategic positioning or client holdings on a transparent ledger. Regulators also require the ability to freeze assets or reverse transactions under specific legal circumstances. Public blockchains generally resist these interventions, creating challenges when compliance frameworks require administrative control.

Private networks provide the logical solution. A private blockchain functions as a shared, cryptographically secure ledger maintained by a trusted group of regulated institutions.

This architecture delivers many of the benefits of distributed ledger technology without the unpredictability of public networks. Competitors cannot observe order flows, trade sizes, or account balances. Transactions remain confidential between authorized participants and regulators.

These networks can also streamline clearing and settlement by enabling institutions to transact directly with one another. This lowers costs, reduces counterparty risk, and supports continuous settlement. Enterprise networks further offer dedicated support and contractual service guarantees that public protocols do not provide.

Institutional Adoption Is Already Underway

Major financial institutions already recognize this reality. J.P. Morgan operates its Onyx platform for tokenized intraday repurchase agreement trades and payments. Goldman Sachs uses its Digital Asset Platform to issue and trade digital bonds and other institutional instruments.

HSBC’s Orion platform supports tokenized gold and digital bond issuance. These examples demonstrate that financial institutions view blockchain primarily as infrastructure for automation, synchronization, and efficiency within controlled environments.

The Direction of Tokenized Equities

Market participants continue to pursue the vision of trading major corporate shares on public decentralized exchanges. Yet the structural, regulatory, and operational realities of global finance point elsewhere.

The Securities and Exchange Commission may eventually adapt market rules for digital assets, but the infrastructure itself will remain largely in private hands.

Tokenized equities are far more likely to thrive on secure, permissioned networks designed for institutional performance and compliance than on fully public chains. The future of financial innovation is not public exposure. It is private, efficient infrastructure built to meet the demands of modern capital markets.

Source:

https://www.financemagnates.com/cryptocurrency/wall-street-may-embrace-tokenized-stocks-but-not-on-public-blockchains/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

September 29th, 2024

Public sector IT strategies 2024: Leveraging AI and Blockchain for transforming governance

As we look to the future, it’s clear that the public sector IT leaders who successfully navigate the integration of AI and blockchain will be well-positioned to deliver transformative changes in governance.

We’re seeing a huge shift in how governments are using technology. It’s not just about upgrading computers anymore, it’s about using powerful tools like AI and blockchain to completely change how things work. This is a chance to make governments more efficient, transparent, and trustworthy.

Think of all the ways AI is already being used: streamlining welfare, making immigration decisions fairer, catching fraudsters, planning cities, and even helping doctors. And this is just the beginning!

But there are worries too. Can we trust AI to be fair and unbiased? That’s where blockchain comes in. It’s like a digital ledger that keeps track of everything, making sure AI decisions are transparent and accountable.

Imagine a world where:

Every government decision made by AI is recorded and can be checked by anyone, ensuring fairness and stopping corruption.
AI analyses huge amounts of data to help governments understand what citizens need and provide better services.
Cities use AI and blockchain to manage traffic, energy, and waste more efficiently

The adoption of AI in government operations has already begun to yield significant benefits across various domains. From streamlining welfare payments to optimising immigration decisions, AI’s impact is far-reaching. Public servants are harnessing its capabilities to detect fraud, plan infrastructure projects, respond to citizen queries, assist in bail hearings, triage healthcare cases, and even establish drone paths. These applications merely scratch the surface of AI’s potential in the public sector.

However, the integration of AI into existing systems is not without its challenges. Concerns about transparency, accountability, and the potential for bias in AI decision-making processes have led some governments to approach this technology with caution. This is where blockchain technology enters the picture, offering a solution that addresses these concerns while amplifying the benefits of AI.

Incorporating Blockchain into AI-driven government systems

Blockchain, with its inherent characteristics of immutability, transparency, and decentralisation, provides a robust framework for ensuring the integrity and traceability of AI-driven processes. By keeping an unalterable record of all changes and decisions made by AI systems, blockchain technology can serve as a crucial accountability mechanism. This symbiotic relationship between AI and blockchain has the potential to create a new paradigm in public sector IT – one that combines the efficiency and insights of AI with the trust and transparency of blockchain.

The AI Strategy for Government, as outlined by various forward-thinking administrations, presents a vision where government agencies leverage AI to deliver high-impact outcomes in their core business. This strategy typically encompasses five key recommendations:

Identifying common AI applications that can be proliferated across different departments and agencies.
Pinpointing signature AI use cases to demonstrate tangible impact and build public confidence.
Productionising AI tools by building centralised infrastructure and resources.
Proliferating AI capabilities by broadening and deepening technical expertise within the public sector workforce.
Strengthening trust in the government’s use of AI by establishing robust governance frameworks.

These recommendations provide a solid foundation for the integration of AI into public sector operations. However, the addition of blockchain technology can significantly enhance this strategy, addressing some of the key concerns associated with AI adoption in government.

One of the primary advantages of incorporating blockchain into AI-driven government systems is the establishment of an immutable audit trail. Every decision made by an AI system can be recorded on the blockchain, creating a transparent and tamper-proof record. This not only ensures accountability but also allows for thorough scrutiny of AI decision-making processes, helping to identify and mitigate potential biases or errors.

The use of smart contracts on blockchain platforms can help align AI systems with their primary tasks and objectives. Smart contracts can be programmed to enforce specific rules and conditions, ensuring that AI systems operate within predefined parameters. This creates a system of checks and balances, mitigating the risk of AI systems deviating from their intended purposes or making unauthorised decisions.

The synergy between AI and blockchain extends beyond mere record-keeping and accountability. AI can analyse the vast amounts of data stored on blockchain networks to derive valuable insights for policymaking. By processing citizen feedback, transaction data, and other relevant information stored on the blockchain, AI systems can help governments make more informed, data-driven decisions that are responsive to the needs and preferences of their citizens.

Transforming public services with AI and Blockchain

This data-driven approach to governance has the potential to transform how public services are delivered. For instance, AI algorithms could analyse blockchain-stored data on citizens’ interactions with various government services to identify bottlenecks, inefficiencies, or areas for improvement. This information could then be used to optimise service delivery, potentially leading to more personalised, responsive, and anticipatory public services.

In the area of policy-making and planning, the combination of AI and blockchain can provide governments with unprecedented capabilities. AI’s predictive analytics, when applied to the wealth of data securely stored on blockchain networks, can offer more accurate forecasts and deeper insights into societal trends. This could enable governments to anticipate future challenges, from demographic shifts to economic fluctuations, and develop proactive policies to address them.

The potential applications of this technology duo are vast and varied. In the field of public finance, for instance, AI could analyse blockchain-recorded transaction data to detect patterns indicative of fraud or tax evasion, while the immutability of blockchain ensures the integrity of financial records. In healthcare, AI could process anonymised patient data stored on blockchain networks to identify public health trends or predict disease outbreaks, all while maintaining patient privacy and data security.

In the domain of smart cities, the convergence of AI, blockchain, and spatial computing presents exciting possibilities. AI algorithms could analyse data from IoT devices recorded on blockchain networks to optimise traffic flow, energy consumption, and waste management. The immutability and transparency of blockchain would ensure the integrity of this data, while smart contracts could automate various city operations based on predefined conditions.

It’s crucial to acknowledge that the integration of AI and blockchain in public sector IT is not without challenges. Technical hurdles, such as scalability issues in blockchain networks and the computational demands of AI systems, need to be addressed. There are also important ethical considerations, particularly around data privacy and the potential for surveillance. The successful implementation of these technologies requires significant investment in infrastructure and human capital. Governments need to prioritise the development of AI and blockchain expertise within their workforce, potentially through partnerships with academic institutions and the private sector.

Public acceptance and trust are also critical factors. Governments must be transparent about how they’re using these technologies and provide clear explanations of how AI-blockchain systems make decisions that affect citizens’ lives. Public education initiatives may be necessary to help citizens understand the benefits and limitations of these technologies.

In Conclusion

Despite these challenges, I believe the potential benefits of integrating AI and blockchain in public sector IT far outweigh the obstacles. This technological convergence offers a path towards more efficient, transparent, and responsive governance – a goal that should be at the forefront of any public sector IT strategy.

As we look to the future, it’s clear that the public sector IT leaders who successfully navigate the integration of AI and blockchain will be well-positioned to deliver transformative changes in governance. By harnessing the analytical power of AI and the trust-building capabilities of blockchain, governments can create a new paradigm of public service – one that is more efficient, more accountable, and more attuned to the needs of citizens.

In conclusion, the focus on integrating AI with existing systems and adopting blockchain technology in the public sector represents a forward-thinking approach to governance in the digital age. This strategy has the potential to enhance decision-making, improve service delivery, optimise internal operations, and strengthen public trust in government institutions. As these technologies continue to evolve and mature, we can expect to see increasingly sophisticated applications that redefine the relationship between citizens and their governments.

The journey towards fully realising the potential of AI and blockchain in public sector IT will undoubtedly be complex and challenging. It will require sustained commitment, significant resources, and a willingness to embrace change and innovation. However, for those governments willing to embark on this journey, the rewards promise to be transformative – ushering in a new era of smart, responsive, and trustworthy governance that is well-equipped to meet the challenges of the 21st century.

Source: https://ciosea.economictimes.indiatimes.com/blog/public-sector-it-strategies-2024-leveraging-ai-and-blockchain-for-transforming-governance/113050118

Anndy Lian

www.anndy.com

j j j

March 9th, 2024

Public Market- Where are the biggest institutional opportunities?- Digital Assets: Realised – Hong Kong

Public Markets – Where are the Biggest Institutional Opportunities? ETF, Mutual Funds, Stocks, Bonds

– Moderator: Julien Bahurel, Partner, Deep Blue/Definer Fund
– Anndy Lian, Senior Advisor, Peach Income Fund
– Tony Wong, Managing Director, CSOP Asset Management
– Nicholas Studholme Wilson, Chief Operating Officer – Asia, GFO-X

At the panel discussion, industry experts gathered to explore the transformative potential of tokenization in asset classes and the future of financial markets. The conversation, moderated by Julian, delved into the implications of digitizing assets and the infrastructure required to support this evolution.

Julian opened the panel by highlighting the significance of functional markets, which are valued at approximately 4 trillion dollars. The focus then shifted to the opportunities presented by liquid markets through tokenization or digitization.

Tony discussed the enormous opportunities within the crypto space, particularly in Asia, where a significant portion of crypto trading activity originates. He emphasized the institutional interest in crypto markets, especially following price openings, and the inquiries from traditional managers and private bankers about accessing these new asset classes with appropriate risk levels. He pointed out that mutual funds might be the first asset class to adopt tokenization, revolutionizing the distribution landscape. He envisioned mutual funds being traded on exchanges like any other asset, within regulatory frameworks, making them accessible 24/7.

Anndy concurred with Tony’s views on mutual funds. He described tokenizing them as a “piece of cake” and predicted a substantial uptake, particularly in Hong Kong, which could become a significant player in the Asian market. Anndy also touched upon the role of exchanges like NASDAQ in a blockchain-dominated world, speculating that traditional exchanges might adapt to offer 24/7 services using blockchain technology.

Nicholas shared his perspective on achieving the end goal of a fully tokenized state on multiple chains. He stressed the importance of starting with existing infrastructure to generate revenue before transitioning to more advanced systems. Nicholas also discussed the challenges of latency and privacy considerations, suggesting that permissioned chains might be a necessary starting point before moving to public chains.

The panelists debated the coexistence of traditional liquid markets with tokenized markets, agreeing that while they may initially coexist, the superior efficiency of tokenized systems would eventually lead to a transition.

The conversation also touched on the regulatory implications of tokenization. While the technology offers exciting possibilities, it also presents challenges for regulators who must adapt to a rapidly evolving landscape.

As the discussion concluded, the panelists expressed optimism about the future of tokenized markets. They envisioned a world where traditional and tokenized markets coexist and eventually converge, thanks to improved infrastructure and broader acceptance of blockchain technology.

The panel’s insights suggest that while the journey toward widespread tokenization is still in its early stages, the destination promises a more inclusive and efficient market for all participants. As the technology matures and regulatory frameworks evolve, we may witness a significant shift in how assets are traded and managed globally.

Digital Assets: Realised held in Hong Kong on 7 March 2024. The event brought traditional funding, listing players, and new digital exchange and platform opportunities.