Flow Traders-Tokenization in Capital Markets: A Market Maker's Perspective

July 3, 2025-Tokenization unlocks efficiencies like instant settlement, 24/7 trading, and fractional ownership-but real-world adoption depends on solving infrastructure and regulatory challenges, not just technology.
Market makers face key friction points in tokenized markets: fragmented liquidity requiring pre-funding across blockchains, lack of product-market fit without real demand, and operational complexity from 24/7 trading.

Stablecoins succeeded because of simplicity, open access, and clear use cases in payments and crypto trading; tokenized money market funds are slower to grow due to compliance burdens and less obvious utility.

A common misconception is that market makers can manufacture liquidity out of thin air-when in reality, they rely on demand, legal clarity, and reliable settlement rails to operate effectively.

Tokenization's future hinges on fixing infrastructure-cross-chain interoperability, legal certainty, investor access, and better tooling-before it can meaningfully scale in capital markets.

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Source: flowtraders