Tokenization has exposed a structural mismatch in global finance: blockchain markets operate around the clock, while most equities and bonds remain tied to conventional trading hours. The Algorand Foundation and Flow Traders are addressing this gap by providing continuous institutional liquidity for ALGO, the Algorand blockchain’s native asset. Deeper base-layer liquidity could make market access, hedging and capital movement more predictable for institutions entering tokenized markets.
In a written interview with Korea IT Times, Amar Odedra, Chief Commercial Officer of the Algorand Foundation, said liquidity alone will not bring tokenized finance into the institutional mainstream. Regulatory clarity, qualified custody, real-time compliance, enforceable settlement and cross-chain interoperability must develop alongside it. For South Korea and other Asian markets, 24/7 liquidity could attract global capital beyond local trading hours and help connect Asian and Western market sessions.
The following is the Q&A.
Q. Why has continuous, 24/7 liquidity become important to institutional participation in onchain markets, and what barriers does it remove for professional investors?
A fund in Seoul that wants exposure to a US-listed asset can typically trade only while US markets are open. Once those markets close, the fund continues to hold that exposure but cannot adjust it until the market reopens.
Continuous liquidity removes that gap. Investors and traders can enter, exit and hedge positions whenever necessary, without being constrained by time zone differences.
Q. Flow Traders will provide continuous liquidity for ALGO. How could deeper liquidity in a blockchain’s native asset improve liquidity for tokenized securities and other real-world assets issued on that network?
A blockchain’s native asset often serves as base-layer collateral within decentralized finance protocols, underpinning a broad range of transactions.
Deeper liquidity in the native asset improves efficiency at that foundational level. It can make trading on the network cheaper and more predictable while allowing institutions trading tokenized securities to move capital into and out of the ecosystem more smoothly.
Q. Many underlying assets, including equities and bonds, trade only during conventional market hours. How can their tokenized versions maintain credible price discovery when the underlying markets are closed?
Outside conventional trading hours, tokenized markets generally trade more cautiously. Price discovery may draw on related markets that remain open, including futures contracts, European or Asian trading activity and movements in comparable assets.
When the underlying market reopens, the tokenized price and the traditional market price are expected to converge, with the reopening price effectively serving as a correction. Credibility is supported by traders’ expectation that prices will eventually return to alignment with the underlying market. That expectation helps prevent tokenized prices from moving too far from economic reality.
Q. What risks do professional market makers assume when providing liquidity around the clock, particularly during periods of low activity, market stress or sharp price divergence?
During periods of low activity, market makers risk becoming stuck with positions they cannot readily offload because there are not enough buyers or sellers available.
Under market stress, prices can move rapidly and unpredictably. The gap between a market maker’s hedges and its actual exposure may widen faster than the firm can adjust.
There is also continuous operational risk. In a market without scheduled closing hours, there is no natural pause during which systems and positions can be reviewed and reset. Any operational error or gap in coverage can therefore generate losses much more quickly than in a conventionally scheduled market.
Q. Tokenized assets and their liquidity remain fragmented across blockchains, exchanges and trading venues. Could this limit institutional adoption, and what forms of interoperability will be required?
As demand grows, multiple issuers may offer tokenized versions of the same underlying security across a range of blockchains. If these assets trade in small, disconnected pools across different networks and venues, institutions face wider spreads, more difficult execution of large orders and inconsistent pricing.
Addressing this problem will require cross-chain interoperability that allows assets and value to move safely between blockchains without creating further fragmentation. Liquidity aggregation will also be important, enabling trades to be routed automatically across multiple exchanges to identify the best available price.
Common token standards and shared compliance and identity frameworks represent another form of interoperability. They can help ensure that a tokenized asset is recognized and trusted consistently, regardless of the network or venue on which it is traded.
Q. Beyond liquidity, what regulatory, custody, compliance and settlement infrastructure must be established before major financial institutions can participate in tokenized markets at scale?
Regulatory clarity must come first. Institutions will not commit substantial capital to a market where the legal treatment of a tokenized asset remains unsettled. Rules must specify how these assets are classified and who bears liability when something goes wrong.
Custody is the second requirement. A bank or asset manager cannot necessarily hold tokenized securities in the same way it holds cash or traditional securities today. It needs qualified custody infrastructure designed for onchain assets and capable of providing protections comparable to those regulators already require for conventional holdings.
Compliance systems must operate in real time rather than only after transactions have occurred. Identity and eligibility should be verified as a trade takes place, instead of potential violations being identified days later.
Settlement ties these components together. Institutions need certainty that once an onchain trade is executed, it is final and legally enforceable in the same way as a transaction completed through a traditional exchange. Without that certainty, the other elements cannot support institutional participation at scale.
Q. South Korea and other Asian markets are developing frameworks for tokenized securities and digital assets. What opportunities could 24/7 onchain liquidity create for the region, and what lessons should policymakers and financial institutions consider?
Continuous onchain liquidity could help South Korea and other Asian markets attract global capital beyond their traditional trading hours. This could position the region as a bridge between Asian and Western trading sessions.
Policymakers will naturally want to establish legal clarity first. Financial institutions, meanwhile, should treat liquidity and market infrastructure as parallel priorities. They need to develop custody, settlement and compliance systems so they are prepared as Korea and other markets advance their regulatory frameworks for tokenized securities and digital assets.
