Tokenization and Market Plumbing: Is the Efficiency Gain Worth the Cost?

Broadridge’s Distributed Ledger Repo platform saw daily repo volumes peak at $384 billion in late 2025 before growth flattened by mid-2026, signaling a shift from rapid adoption to market maturity. While tokenized U.S. Treasury securities grew to $12.99 billion by March 2026, the transition to distributed ledger technology faces significant structural hurdles. Atomic settlement eliminates counterparty risk but sacrifices the 98 percent netting efficiency currently provided by the DTCC, forcing institutions to hold higher levels of pre-funded liquidity. This fragmentation across siloed, permissioned ledgers creates operational friction, forcing banks to maintain redundant reserves on multiple platforms. Furthermore, the integration of tokenized assets into central bank collateral frameworks, such as the Eurosystem’s recent moves, introduces new complexities for monetary policy transmission. Market participants now estimate a five-to-ten-year horizon before tokenized solutions achieve dominance in securities issuance and trading. Ultimately, the industry must reconcile the promise of instant settlement with the reality of increased capital requirements and the lack of interoperability between competing financial networks.