Tokenized equities threaten TradFi PFOF economics
The speakers argued that traditional financial intermediaries are lobbying to delay the SEC's innovation exemption because 24/7 tokenized equity trading on permissionless rails directly threatens their payment-for-order-flow revenue models.
The argument
The guest noted that firms like Citadel, which run massive off-exchange market-making books, are pushing back under the guise of regulatory caution to protect their toll booths. Despite these delays, the speakers argued that the underlying rails for tokenization are already being laid by major institutions, making the transition inevitable.
The thesis, stress-tested
✓ What validates it
- ✓The SEC officially reinstating or modifying the innovation exemption
- ✓A major US issuer successfully launching a native on-chain equity token with regulatory consent
▸ Risks discussed
- ▸Lobbying from powerful TradFi incumbents could indefinitely delay regulatory approval
- ▸Unresolved compliance challenges regarding KYC, AML, and dividend distribution to anonymous on-chain addresses
Hear it yourself
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