Ahead of NYSE Listing, Securitize Exec Says DeFi Can Break Wall Street’s Grip on Stock Lending

Tokenization is often described as a playground for Wall Street, but Securitize President Brett Redfearn also sees it as a Trojan Horse for consumers.

In an interview with Decrypt, the SEC’s former director of trading and markets—who joined Securitize in April—argued that bringing real-world assets on-chain will directly benefit everyday investors by leaning into crypto’s core ethos: disintermediation.

From Redfearn’s perspective, enabling investors to maintain control over their assets in digital form unlocks efficiencies that traditional financial systems keep behind closed doors.

As an example, he pointed to stock lending, a standard feature on many major retail brokerages that passively monetizes users’ portfolios by loaning out their shares to short-sellers. 

Today, retail investors let brokers lend out their idle shares while quietly surrendering the majority of the profits to the middleman. Yet tokenization changes the math, Redfearn said. By cutting out the centralized gatekeepers, he thinks the technology unlocks new ways for consumers to put their assets to work, especially when it comes to decentralized finance.

“I think that business is totally disruptible,” Redfearn emphasized. “There’s a lot of opportunities when you start to disintermediate traditional businesses.”

On Thursday, Securitize’s stock is expected to begin trading on the New York Stock Exchange under the ticker symbol “SECZ,” testing whether Wall Street’s embrace of tokenization extends to the companies that have taken the technology mainstream in recent years.

While Securitize has become a leader in enabling companies like BlackRock to issue securities directly on-chain, Redfearn acknowledged that DeFi’s potential to fuel the company’s growth rests on the efforts of swaths of unaffiliated developers.

“I believe that the sky’s the limit in terms of what builders are going to be able to achieve that’s going to bring benefits for investors who are interested in participating in this sort of tokenized securities ecosystem,” he added.

The rates that consumers enjoy through stock lending vary. Robinhood keeps around 85% of associated revenue, while Charles Schwab splits it down the middle, per NerdWallet.

Still, some firms may already be drawing closer to Redfearn’s vision. Robinhood is expected to unveil new products on Wednesday, and Compass Point analyst Ed Engel wrote in a recent note that “tokenized equities compatible with DeFi” will likely be among them, following experimentation with the format for customers in Europe last year.