Tokenization is moving first toward institutional plumbing rather than retail trading, with short-term fixed-income products emerging as a potential source of collateral for derivatives and other capital-markets transactions, according to Andy Baehr, managing director of asset management at GSR.
Speaking with Kelvin Sparks at the Wyoming Blockchain Symposium 2026, Baehr said the immediate opportunity lies in converting assets such as short-dated US Treasuries into tokenized instruments that firms can use in back-end trading workflows. The aim is to put collateral to work while it supports futures or over-the-counter positions, rather than leaving cash idle in conventional margin arrangements.
A firm posting collateral for a derivatives trade could, in this model, hold tokenized short-term government debt and potentially retain the yield generated by that asset. The structure would connect collateral management with on-chain settlement and asset servicing, two areas where traditional markets often rely on separate intermediaries and restricted operating hours.
Baehr framed the opportunity as an institutional use case built for scale. Consumer access and speculative trading may eventually follow, but the early value proposition centers on treasury operations, margin management and the movement of assets between trading counterparties.
Tokenized equities could expand venue access
Baehr also said tokenized equities could eventually allow stocks to trade around the clock on venues already used for digital assets. Such a system would give participants a way to move between crypto assets, tokenized cash instruments and tokenized shares without relying on entirely separate market infrastructure for each asset class.
The concept carries difficult market-structure questions. Equity trading involves shareholder rights, corporate actions, custody rules, market surveillance and securities regulation that do not disappear when a stock is represented on a blockchain. Baehr said the eventual scale of tokenized-equities adoption remains uncertain.
GSR is positioning itself to provide liquidity if activity in tokenized equities and related instruments develops. The company has operated as a crypto market maker and over-the-counter dealer since 2013, a background that could translate to markets where institutions need continuous two-way pricing rather than simply a technical method for issuing tokens.
Liquidity will likely determine whether tokenized securities become useful collateral and trading instruments beyond limited pilots. Institutions managing large positions need confidence that they can exchange an asset quickly, at a transparent price and without creating a significant gap between the token’s market value and that of the underlying security.
GSR expands its tokenization business
GSR has recently added businesses and investments tied to that market opportunity. In April, the firm led an investment in Libeara, a tokenization platform backed by SC Ventures, the venture arm associated with Standard Chartered. Libeara focuses on infrastructure for bringing regulated real-world assets onto blockchain networks.
The investment followed GSR’s March acquisitions of Autonomous and Architech, which expanded the company’s token advisory capabilities. The moves place GSR in several parts of the tokenization value chain: advisory work for issuers, market-making services for secondary trading and asset-management products connected to tokenized collateral.
That combination reflects a practical constraint facing the sector. Creating a token is only one stage of bringing a financial asset on-chain. Issuers need legal and operational structures, distribution channels, custody arrangements, valuation processes and reliable secondary liquidity. A tokenized Treasury fund, for example, must preserve the economic and legal characteristics that make conventional short-term government debt useful to institutions.
Lending remains an unresolved market problem
Baehr identified lending as another area under development, particularly for firms seeking to borrow dollars against native crypto tokens. He said those borrowing costs remain high and that GSR’s asset-management business is focused on reducing them.
The obstacle is not simply the availability of collateral. Lenders must assess counterparty risk in a market with fragmented liquidity pools, differing collateral standards and limited common benchmarks for borrowing costs across time periods. Baehr contrasted the current environment with traditional prime brokerage, where large financial institutions typically offer financing, custody and execution services within more established risk-management frameworks.
A term structure — the curve showing how interest rates differ for loans of various durations — remains less developed in crypto credit markets. Without consistent short-term, medium-term and longer-dated lending benchmarks, borrowers can face volatile funding conditions and lenders have less standardized information for pricing risk.
Tokenized short-term government debt could help address part of that challenge if it becomes widely accepted as high-quality collateral. It would give market participants a digital representation of an income-generating asset that can potentially move across compatible settlement systems more efficiently than conventional collateral arrangements. It would not remove credit risk, legal constraints or the need for careful margin practices.
The market’s progress will therefore depend less on the promise of bypassing existing financial institutions than on whether tokenized assets can meet institutional standards for redemption, legal ownership, liquidity and risk controls. Baehr’s comments point to a near-term contest over trading infrastructure: whether tokenized Treasuries and, later, equities can become dependable tools for collateral and financing rather than isolated blockchain products.
Curious how tokenized markets work in practice? Explore tokenized equities and their 24/7 trading potential.
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