The Revolution Will Be Tokenized ft. Thomas Cowan from Galaxy

Tokenization, Institutional Adoption & the Future of Crypto: A Discussion with Galaxy’s Thomas Cowan at Salana Breakpoint

Key Concepts:

• Tokenization: The process of representing real-world assets (like stocks, bonds, loans, or even real estate) as digital tokens on a blockchain.
• TRADI (Traditional Finance): The conventional financial system, including banks, stock exchanges, and asset managers.
• AUM (Assets Under Management): The total market value of the financial assets that a financial institution manages on behalf of its clients.
• Sweep Function: Automated movement of idle capital into higher-yielding assets, like treasuries or stablecoins.
• Collateral Mobility: The ease with which collateral (assets pledged as security for a loan) can be used across different financial transactions.
• SPV (Special Purpose Vehicle): A legal entity created for a specific financial purpose, often used in asset securitization.
• CLO (Collateralized Loan Obligation): A complex financial product that pools together a collection of loans and repackages them into different risk tranches.

I. Introduction & Current Market Sentiment

The discussion took place at Salana Breakpoint in Abu Dhabi, with host interviewing Thomas Cowan, Head of Tokenization at Galaxy. The initial observation was a palpable energy and bullishness at the conference, contrasting with the often-negative sentiment on platforms like Crypto Twitter. A playful opening acknowledged that 37% of viewers are not subscribed to the channel, encouraging engagement.

II. The Shift in Crypto Cycles & Institutional Interest (2026 & Beyond)

Cowan highlighted a key difference in the current crypto cycle: tokenization is becoming increasingly decoupled from the price volatility of Bitcoin and other cryptocurrencies. He emphasized a significant surge in institutional interest in tokenization, driven by two primary factors:

• Regulatory Clarity: Increasingly defined regulations are providing institutions with the confidence to enter the space.
• Technological Maturity: Blockchains like Salana have demonstrably improved in reliability and scalability, now rivaling or exceeding traditional financial infrastructure. He specifically noted Salana’s improvements in uptime and reliability.

He described this combination of factors – regulatory clarity, technological maturity, and TRADI interest – as a “tailwind” accelerating the industry’s maturation.

III. Galaxy & State Street’s Tokenized Money Market Fund

Galaxy recently announced a partnership with State Street (a $5 trillion AUM asset manager) to tokenize a money market fund. This fund, similar to existing tokenized money market funds like Bidd, focuses on maximizing returns on idle capital through a “sweep function” – automatically shifting funds between treasuries and stablecoins.

Cowan positioned this as a foundational product for a broader partnership, aiming to “upgrade the financial system” rather than “upend” it. He emphasized the potential for this to be the “beginning product” for many other aspects of the partnership.

IV. Galaxy’s Broader Tokenization Initiatives

Galaxy is actively involved in multiple tokenization projects:

• All Unity (Germany): Launched a stablecoin in partnership with DWS and Flow Traders in July.
• Tokenized Stock: Tokenized its own stock in September.
• Upcoming Announcements: Further announcements are expected before the end of the year.

Cowan acknowledged Galaxy’s relatively small size compared to traditional financial institutions (“a complete rounding error”), but emphasized their role as a bridge and partner for these larger players.

V. The Biggest Catalyst for Tokenization Momentum

While acknowledging previous catalysts like Bitcoin price movements, Cowan identified a fundamental shift in the dynamic: TRADI institutions are now proactively asking how to participate in tokenization (“it’s no longer should we, it’s how do we”). This change has shifted Galaxy’s focus from sales to education, explaining the benefits of the technology.

VI. Addressing TRADI Hesitations & Education Challenges

A significant challenge in educating TRADI institutions is overcoming skepticism stemming from past crypto failures and volatility. Cowan addressed this by acknowledging past issues but emphasizing the current state of the industry – regulatory clarity, technological maturity, and institutional interest.

He highlighted that tokenizing their own stock was a significant milestone, but also recognized it as “just the beginning” as larger institutions like NASDAQ and NYSE begin to explore the technology.

VII. Why Tokenization is Attractive to TRADI

Tokenization offers TRADI institutions benefits beyond simply being “better, faster, cheaper.” Cowan outlined two key areas:

• Access to Crypto-Native Assets: Tokenization provides a way for TRADI to gain exposure to assets like Bitcoin without the complexities of direct custody and private key management (similar to the function of Bitcoin ETFs).
• Upgrading Traditional Financial Assets: Tokenization unlocks four key benefits for traditional assets like loans (specifically referencing CLOs):
  • Instant Settlement: Significantly faster settlement times compared to traditional systems (potentially reducing from 14-15 days to near-instant).
  • Full Transparency: Real-time visibility into the performance of underlying assets.
  • Secondary Market Liquidity: Easier trading and transfer of tokenized assets.
  • Collateral Mobility: Increased confidence in collateral, leading to greater lending opportunities.

VIII. Beyond Stocks: The Scope of Tokenization

Cowan stated that “pretty much anything you put into an SPV” can be tokenized. However, he stressed the importance of focusing on use cases that create real utility, drawing a parallel to the development of the iPhone and its app store. The focus should be on what tokenization enables, not just on tokenizing for the sake of it.

IX. Cowan’s Vision for the Future & Salana’s Role

Cowan expressed excitement about the ongoing conversations with TRADI institutions and predicted a rapid acceleration of adoption once those institutions fully commit. He encouraged those in the crypto space to embrace this incoming demand and help bridge the gap between the two worlds.

He highlighted Salana as a key blockchain partner for Galaxy, praising its strong developer team and speed. Galaxy’s role is to work across multiple blockchains, but Salana is a standout due to its specific strengths.

X. Conclusion: Bridging the Gap & Upgrading the Financial System

The core takeaway is that tokenization is moving beyond a speculative concept to a practical application with significant potential to upgrade the existing financial system. The convergence of regulatory clarity, technological maturity, and institutional interest is creating a unique opportunity for innovation and collaboration between the crypto and TRADI worlds. Galaxy is positioned to play a key role in facilitating this transition, with Salana being a crucial blockchain partner in this endeavor.