16 Jan The Liquid Network & The Inevitable Rise of Bitcoin-Native Tokenisation
in Education
BlackRock CEO Larry Fink has called tokenisation the “next generation of markets.” Regardless of whether trillion-dollar projections materialise on schedule, the direction of travel is clear. Regulators are no longer ignoring the trend and capital is swiftly moving on-chain.
The question now isn’t whether financial assets will be tokenised, but on what kind of infrastructure.
For financial institutions, the increasingly obvious answer is the Liquid Network, a Bitcoin sidechain developed by Blockstream and the preferred asset issuance technology for Bitfinex Securities.
According to RWA.xyz, the industry-standard analytics platform for tokenised assets, Liquid is already the world’s third-largest blockchain for distributed real-world assets (RWAs), behind only Ethereum and BNB Chain.
Even that ranking likely understates Liquid’s footprint, failing to capture all tokenised assets on the network including numerous offerings from Bitfinex Securities, as well as over $1 billion in promissory notes issued via Mifiel in Latin America.
With total value locked (TVL) today exceeding $5 billion, Liquid’s institutional standing continues to grow.
The Importance of Bitcoin-Native Infrastructure
Liquid’s growth reflects a straightforward reality: financial institutions are increasingly realising they need Bitcoin’s battle-tested security model without its inherent layer-1 limitations.
Bitcoin offers unmatched decentralisation and immutability. Its design, however, prioritises security over speed; on-chain transactions can take 10 minutes or more to confirm, and fees can spike during periods of high demand. This is less than ideal for high-frequency financial applications where settlement efficiency is paramount.
In contrast, the Liquid Network is a purpose-built sidechain that extends Bitcoin’s core strengths while addressing these pain points.
Launched in 2018, Liquid is built on Elements, an open-source sidechain framework developed by Blockstream that shares roughly 80 percent of its codebase with Bitcoin Core.
The network itself operates as a federated sidechain, meaning it’s governed by a growing consortium of trusted entities (functionaries) known as the Liquid Federation. This federation includes major players in the Bitcoin ecosystem, such as exchanges and financial institutions, ensuring robust security without the reliance on proof-of-work. Customers can peg Bitcoin into Liquid as L-BTC (Liquid Bitcoin), enabling seamless transfers between the two networks via a two-way peg mechanism.
What sets Liquid apart is its focus on financial markets: it supports confidential transactions, where asset amounts and types are hidden from public view, enhancing privacy for institutional customers. It also delivers one-minute block times and two-minute settlement finality, a dramatic improvement over Bitcoin’s base layer. For banks moving tokenised bonds or asset managers rebalancing portfolios, for example, this combination of privacy, speed and Bitcoin-native security is critical.
Bitfinex Securities: Leading on Liquid
At Bitfinex Securities, a fully-regulated digital securities platform operating in Kazakhstan’s Astana International Financial Centre and El Salvador, we’ve built our entire issuance infrastructure on Liquid. The choice to do so wasn’t arbitrary but rooted in both Bitfinex’s Bitcoin-first ethos and, most importantly, the clear technical necessities of regulated financial markets.
Bitfinex Securities has facilitated the issuance of multiple tokenised securities on Liquid to date, including microfinance bonds issued with Mikro Kapital, as well as the issuance of the first-ever regulated public offering of tokenised US Treasury bills. The platform also lists and distributes the Blockstream Mining Note (BMN), providing regulated investor access to Bitcoin mining exposure.
Across these offerings, Bitfinex Securities has surpassed $250 million in assets issued on Liquid, all of it representing real capital deployed in regulated structures, not speculative tokens.
What makes Liquid particularly suitable for Bitfinex Securities is its combination of compliance capabilities and Bitcoin alignment. Liquid’s Confidential Transactions meet regulatory requirements for investor privacy without compromising auditability for authorised parties. The network’s Asset Management Protocol (AMP) allows issuers to enforce transfer restrictions, KYC requirements, whitelists and other compliance controls at the protocol level.
For a securities platform operating across multiple jurisdictions these qualities are essential.
Why Liquid’s Growth is Inevitable
Several converging trends point to continued growth for Bitcoin-native tokenisation infrastructure and Liquid in particular.
First, institutional appetite for Bitcoin exposure continues to expand beyond simple holdings. Nation-states are continuing to explore Bitcoin reserves, more and more corporate treasuries are allocating meaningfully and traditional finance is building entire product lines around it. A tokenisation layer that brings regulated securities to Bitcoin’s ecosystem lets institutions participate without abandoning the base layer to which they’re already committed.
Second, regulatory clarity around digital securities is improving. Frameworks in the United States, Singapore, the European Union and jurisdictions like El Salvador are creating viable paths for compliant issuance. Liquid’s federated model and built-in compliance tooling were designed for this environment from the start. As regulation matures, infrastructure that anticipated these requirements has a clear advantage.
Third, the tokenisation market itself is maturing beyond pilot projects. With the broader RWA tokenisation market reaching $24 billion in 2025 and projected to hit anywhere from $2 trillion to $16 trillion by 2030, the infrastructure choices made today will shape the industry for years. Liquid isn’t trying to be everything to everyone — it’s focused on a specific, high-value use case: regulated securities on Bitcoin rails.
Finally, network effects are building. As more issuers launch on Liquid, more wallets, exchanges, and custody providers add support. More liquidity follows more assets, which will inevitably attract more issuers. Bitfinex Securities’ success provides a template that other platforms can follow. The integration work gets easier with each new participant.
Building for the Long Term
Liquid is not yet the default settlement layer for global capital markets, and it does not pretend to be. Its focus on Bitcoin-native security, regulatory-grade confidentiality and protocol-level compliance, however, makes it well suited to institutions that are serious about issuing and managing digital securities.
As tokenisation moves from experimentation toward repeatable issuance, the question will not be which blockchain is the most innovative or feature-packed. It will be which infrastructure can support regulated capital markets reliably, over long time horizons and without changing its rules every cycle.
The answer to that question is Liquid.