Rob Krugman: This Is The Biggest Unlock In Finance Yet (2027)

Rob Krugman describes repo as a major opportunity for tokenization: activity is about $380 billion a day, and he expects it to approach $1 trillion by calendar year-end. Repo is overnight lending between banks to meet operational capital needs. Shorter borrowing periods can reduce interest costs and improve capital efficiency, while tokenized assets could broaden the collateral available to support those transactions.

Tokenization could make Treasury-backed repo simpler and expand the cash leg beyond fiat to stablecoins, deposit tokens, or money markets. Broadridge has extended US dollar repo to G7 currencies using different underlying Treasuries, and Krugman sees money markets, tokenized equities, and funds as other possible collateral. Assets that might otherwise sit idle could be put to work and generate yield. He estimates the collateral market could grow from $13 trillion to $100 trillion or $150 trillion as more assets become usable, but says he does not know how large it will ultimately become.

Smart contracts could encode KYC, AML, OFAC, and other obligations, completing required checks before a trade and specifying who may borrow an asset, where, and for how long. They could also automate services such as proxy voting and corporate-action distributions. Krugman cautions that tokenization does not eliminate regulatory obligations, and moving assets onto new systems is complicated; automation changes how requirements are handled, not whether they apply.

Broadridge’s North American post-trade infrastructure maintains books and records for about 300 million accounts, and Krugman says firms cannot feasibly rebuild every downstream service for on-chain activity. Broadridge plans a turnkey service that connects clients to trading venues, supplies wallet and custody infrastructure, and integrates on-chain data with existing records. Clients could use a qualified custodian or hold assets themselves. Its DLX expands the repo offering, supports 18 blockchains, and is designed to remain chain-agnostic.

Krugman calls 2027 “the year of the unlock,” pointing to broker-dealers around the world considering wallets, custody, and related services. He contrasts the 750 million people active in crypto with the billions who could potentially gain access through banks and brokerages. In his view, people may use tokenized products through familiar financial services without necessarily realizing the assets are tokens. Traditional firms are increasingly looking to capture tokenization’s efficiencies, but intermediaries that fail to innovate risk disruption.

Tokenization could let private and alternative investments trade more like equities and lower entry points from about $1 million to a few thousand dollars. It could also allow firms to personalize portfolios with assets clients previously could not access. Krugman sees potential to improve access to dollars in emerging markets through US-backed stablecoins and tokenized Treasuries, and says bank wallets could eventually make overseas transfers near-instant and very low-cost.

He expects traditional and on-chain systems to coexist for the next four or five years, with on-chain systems potentially beginning to replace traditional infrastructure by 2030. That transition depends on firms addressing the complications of moving assets and services onto new systems; tokenization’s promise of broader collateral, access, and efficiency does not mean the existing financial infrastructure can simply be discarded.