In an exclusive interview with The Coin Headlines, Kyle Sonlin, Co-Founder and President at Global Settlement (GSX) shared his thoughts on a wide array of emerging narratives in the digital assets space, ranging from real-world asset tokenization, permissioned blockchains, stablecoin adoption, and more.
Sonlin is an accomplished entrepreneur, investor, and best-selling author with a penchant for blockchain technology. Working in the space since 2015, Sonlin has collaborated closely with financial services firms and raised more than $6 million for his portfolio firms. The interview follows below.
Tokenization has been discussed for years, but adoption is finally accelerating. What has fundamentally changed over the last 12–18 months?
I think the last 12 to 18 months have made the market more disciplined as the financial system has evolved and Institutions are looking at tokenization through transactions now with capital raising, settlement, compliance and liquidity. A token on its own does not mean much if the asset still relies on the same slow processes around it and that in itself is a big shift.
Stablecoins have helped by giving tokenized assets a cleaner cash leg while tokenized money market funds and private credit have also made the use case easier for institutions to understand. The value is in taking assets they already know and making the movement of capital around them faster, cleaner and easier to track and that’s why adoption is picking up now.
What are the biggest misconceptions institutions still have about tokenizing real-world assets?
I believe a common misconception is that tokenization automatically makes an asset more liquid. While it can make ownership easier to record and settle, it cannot create demand where there is none. Ultimately, institutions still have to look at the quality of the asset, who can hold it, and how cash moves when the transaction closes.
The more mature view is that tokenization is infrastructure and it’s useful when it reduces settlement risk, gives investors a cleaner record, and makes cross-border transactions less dependent on slow manual steps. In the end, the institutions are looking at whether the full transaction works better than it would in the traditional process.
What role will interoperability play as more institutions launch permissioned blockchain networks?
Interoperability is going to decide whether permissioned networks become useful infrastructure or just another set of closed systems, and institutions will build their own environments because they need regulatory comfort. The problem comes when an asset, investor or payment cannot move outside that environment without starting the process again.
For tokenized markets to scale, networks need to recognize each other’s credentials and settlement flows, the systems need to work for the customer to make the entire process as seamless as possible. A buyer should not have to repeat the same checks every time they face a new counterparty. An issuer should not be locked into one distribution channel. I think it’s important to make sure regulated capital can move without rebuilding the same workflow every time.
Stablecoins have become one of crypto’s strongest use cases. How do you see them reshaping cross-border payments and corporate treasury operations?
Stablecoins are changing cross-border payments because they deal with a very basic issue across the board: money still moves too slowly. A business can close a deal today and still wait days for the payment to land and that creates risk. It also ties up cash that could be used elsewhere.
For treasury teams, the value is control as they can move dollar liquidity between markets, entities and counterparties with a clearer record of what moved and when. This matters even more as assets move onchain. If the asset settles quickly but the payment still waits on a bank wire, the transaction is only half modernized.
The next phase of this cycle is highly dependent on the trust and infrastructure as institutions will need strong reserve standards, reliable redemption, proper custody and clear local rules. Stablecoins will be used where the payment problem is real and where the controls are strong enough for finance teams to rely on them.
What regulatory challenges still need to be solved before tokenized securities become mainstream?
In my view, the biggest challenge is still legal certainty, because institutions need to be completely clear on what a token represents in practice, what the investor legally owns, who is ultimately accountable for the underlying asset and what happens if there is a dispute, a servicing issue or an operational failure somewhere along the chain. These may sound like very fundamental questions, but they are exactly the questions that determine whether large institutions are willing to move beyond small pilots and begin committing meaningful capital.
There is also still far too much duplication across the market today. An investor may be verified on one platform and then asked to go through the same checks again somewhere else, while transfer restrictions sit in one system, custody sits in another and settlement happens through a separate payment rail altogether. That can be manageable when transactions are relatively limited, but because each additional handoff introduces cost, delay and operational risk, it becomes much harder to scale once volumes begin to grow.
For tokenized securities to become truly mainstream, regulation needs to support much cleaner coordination between issuers, investors, custodians and settlement networks. Compliance should not have to be rebuilt from scratch every time an asset changes hands; it should be able to move with both the participant and the asset. Otherwise, the industry risks recreating many of the same delays and inefficiencies that tokenization was intended to solve in the first place.
What differentiates the GSX Protocol from other tokenization platforms currently serving institutional clients?
GSX begins with settlement, because that is where the real complexity of institutional tokenization tends to sit. Issuing a token is an important first step, but the more difficult part is ensuring that everything works properly once that asset needs to move between parties, capital needs to settle and ownership needs to update in a way that meets the standards institutions and regulators expect.
For a transaction to work in the real world, the investor needs to be properly verified, the cash leg needs to settle, the asset record needs to update correctly and the relevant compliance requirements need to remain attached throughout the entire process. Today, those pieces are often handled across several disconnected systems, which creates friction and makes it difficult for institutions to use tokenized assets at meaningful scale.
GSX is designed to bring those elements closer together, because institutional clients are not simply looking to issue a token and stop there. They need infrastructure that can support a regulated transaction from issuance through to settlement, while also giving the parties involved greater clarity, control and confidence at every stage of the process.
We’ve seen growing institutional interest in tokenized treasuries, money market funds, and private credit. Which sector do you expect to scale the fastest over the next three years?
I would expect tokenized money market funds to scale the fastest over the next three years, largely because they are already closely connected to the way institutions manage cash, liquidity and short-term capital today. The use case is relatively easy to understand, and tokenization can make those assets easier to move, easier to track and potentially more useful in areas such as collateral management and intraday liquidity.
Private credit is likely to be the larger long-term opportunity, but I think it will take more time to develop because every transaction has its own structure, underwriting requirements, servicing needs and investor considerations. Institutions will naturally want more transparency and a deeper level of comfort before they begin using tokenized private credit at significant scale, particularly because these assets are less standardized and often involve more complex risk assessment.
Money market funds have the clearest path in the near term because they are familiar, liquid and already sit close to everyday treasury activity. Private credit will likely follow as the infrastructure becomes more mature and institutions gain greater confidence in using tokenized assets for purposes that go beyond short-term liquidity management.
What’s one trend in tokenization that the market is underestimating today?
Definitely commercial transactions, because much of the conversation today is understandably focused on tokenized funds and treasuries, which are familiar products and easy for people to frame within existing financial markets. However, some of the biggest sources of friction still sit in areas such as trade finance, commodities and energy, where a transaction may already be agreed commercially but payments, documentation and compliance checks can still slow the process down considerably.
This is a use case where tokenization can become particularly valuable, because it has the potential to bring the asset record, the payment flow and the compliance requirements into a more coordinated process. These are not always the most headline-grabbing transactions; they may be supplier payments, recurring allocations, inventory financing or cross-border settlements that take place every week across different markets.
Over time though, that volume becomes incredibly meaningful. I think there is a major opportunity in helping businesses move capital faster, with better visibility and fewer breaks between the systems involved in completing a transaction.
