GoKawiilBitcoin evangelist Michael Saylor said the coming tokenization of financial assets could change how credit and yield are priced across the economy and pose a direct challenge to traditional banking and brokerage businesses.
"The real power of tokenization is it creates a free market in credit formation and yield for asset owners," the Strategy founder and chairman said Thursday on CNBC's "Squawk Box". "So if you can tokenize a bunch of securities, then you can shop for the best credit terms and the highest yield."
By contrast, the banks effectively decide customers' financing terms in the TradFi, or traditional finance, system, he added.
"In the 20th century TradFi economy your bank decides you just won't get credit, you just won't get yield, and there's not a single thing you can do about it," Saylor said. "So tokenization is a free market in capital, and it creates a higher velocity and a higher volatility for capital assets."
Saylor's comments go beyond the usual pitch for tokenizing "real-world" assets like stocks, bonds, funds and private credit. Enthusiasts often tout blockchain technology's potential to bring faster settlement, around-the-clock liquidity and broader access for retail investors to the equities market – and increasingly, trading of private company shares.
The comments come as the industry is holding its breath for the proposed market structure bill known as the Clarity Act to continue to progress through Congress. If eventually signed into law it would, among many other things, create a legal framework for bringing real-world assets fully onchain.
Crypto investors are also hoping to see guidance from the Securities and Exchange Commission on tokenized stocks – potentially allowing blockchain-based representations of stocks to trade in parallel with traditional market. The commission issued a statement earlier this year signaling that tokenized securities are probably coming to mainstream finance but would still be subject to traditional securities laws.
Coinbase , Robinhood and Gemini already offer tokenized stock trading to certain customers today.