Digital asset infrastructure provider BitGo and OTC Markets Group, the operator of regulated over-the-counter securities markets, plan to partner on digital asset trading and custody infrastructure for broker-dealers, a move that could expand institutional access to tokenized securities through existing market infrastructure.
The companies said Wednesday that the proposed alliance will serve more than 150 broker-dealers using OTC Link ATS, an alternative trading system regulated by the US Securities and Exchange Commission. If implemented, participating broker-dealers would be able to quote, trade and settle digital asset securities using the same electronic trading infrastructure they currently use for over-the-counter and US equity markets.
Under the proposal, BitGo Bank & Trust would act as the qualified custodian, while settlement would be facilitated through BitGo’s Go Network. The proposed framework is initially intended to support digital asset securities, with the potential to expand to tokenized assets and commodities as regulatory frameworks evolve.
The announcement comes as traditional financial institutions increasingly explore tokenized versions of real-world assets, while US regulators have moved toward establishing clearer rules for digital asset markets.
In December, BitGo received final approval from the US Office of the Comptroller of the Currency to operate as a federally chartered national trust bank, allowing it to provide qualified custody services under federal banking oversight.
Investors lifted OTC Markets Group’s stock price roughly 2.7% by midday on Wednesday, to $53.50 a share on thin volume.
Related: SoFi taps BitGo to provide infrastructure for bank-issued stablecoin
Why broker-dealers matter for tokenization
Broker-dealers could play a major role in the transition to tokenized securities because they already operate within established regulatory and market frameworks. By integrating digital asset trading and custody into existing infrastructure, the BitGo-OTC Markets alliance could reduce operational barriers for broker-dealers looking to offer tokenized securities without requiring them to adopt entirely new crypto-native systems.
The proposed alliance comes as the market for tokenized securities continues to expand. Analysts at Bernstein have projected that the value of tokenized real-world assets could reach up to $4 trillion by 2030, driven by broader adoption across equities, commodities, and other financial assets.
The announcement also follows similar efforts by companies including Securitize and Cantor Fitzgerald to bring tokenization to capital markets, including initial public offerings and follow-on equity offerings.
Bernstein analysts identified tokenization and prediction markets as the next assets “battleground” for exchanges and brokers. Source: Bernstein
Related: Tradable’s $1B Stellar deal adds to institutional tokenization boom
