While they promise global access and instant settlement, critics argue they’re essentially repackaged derivatives with counterparty risks
Imagine trading Apple stock at 3 AM on a Sunday, using your Tesla shares as collateral in a DeFi protocol, or buying fractional ownership of SpaceX through your crypto wallet. This isn’t science fiction – it’s the reality of tokenized stocks in 2025, where traditional Wall Street meets cutting-edge blockchain technology.
Digital stock tokens blur the lines between crypto and traditional investing. Major crypto exchanges like Kraken, Bybit, and even platforms from the retail trading world like Robinhood or eToro are launching tokenized equity platforms, transforming the way retail investors will access the market.
Tokenized stocks are digital representations of real company shares, living on blockchain networks rather than traditional exchanges. Think of them as crypto twins of actual stocks – each token typically represents one share (or fraction) of a company, fully backed by real shares held in custody.
When you purchase a tokenized Apple stock, a licensed custodian holds the actual Apple share in reserve while you receive a blockchain token that mirrors its price movements. These digital equity tokens can trade on crypto exchanges, integrate with DeFi protocols, and transfer between wallets – capabilities impossible with traditional brokerage accounts.
The tokenized equity space exploded in 2025, with crypto exchanges and traditional brokers racing to capture market share.
Kraken and Bybit launched simultaneously in June 2025, offering over 60 U.S. stock tokens branded as “xStocks.” Partnering with Swiss firm Backed Finance, they tokenized blue-chip names like Apple, Tesla, NVIDIA, and S&P 500 ETFs on the Solana blockchain. KuCoin quickly followed, integrating xStocks for USDT trading pairs, while Bitget joined the party with seamless wallet transfers and DeFi compatibility.
Robinhood made waves by rolling out 200+ tokenized stocks for EU customers, including private companies like OpenAI and SpaceX. Built on Arbitrum blockchain, these tokens drove Robinhood’s stock price to all-time highs upon announcement. eToro expanded to 24/5 stock trading and announced plans for ERC-20 tokenized equities on Ethereum Ethereum Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language, Read this Term, targeting true 24/7 markets by year-end.
Even Gemini entered through a partnership with FINRA-approved startup Dinari, while CMC Markets hinted at tokenized asset launches via CMC CapX. The roster spans from crypto-native exchanges to traditional brokers, all seeking to bridge Wall Street and blockchain technology.
Infrastructure maturity played a key role. High-performance blockchain networks like Solana and Ethereum Layer-2 solutions now offer fast, low-cost transactions suitable for financial applications. Unlike earlier attempts (Binance’s short-lived 2021 experiment), current offerings launch through compliant, licensed entities in crypto-friendly jurisdictions like Switzerland and EU member states.
Global demand for round-the-clock market access drives adoption. Retail investors worldwide want to trade U.S. stocks outside traditional 9:30 AM-4:00 PM EST windows. Backed Finance’s xStocks surpassed $300 million in trading volume within four weeks of launch, demonstrating pent-up appetite for blockchain-based equity trading.
Tokenized stocks promise several advantages over traditional equity trading, starting with extended trading hours. Instead of being locked into 6.5-hour market windows, these tokens trade 24 hours a day, 5 days a week (24/5), covering Asian and European time zones when U.S. markets are closed.
Instant settlement represents another breakthrough. While traditional stocks require T+2 settlement (two business days), blockchain transactions clear in seconds with no intermediaries. Kraken emphasizes this speed advantage, noting trades execute on-chain immediately rather than waiting for clearing houses.
Fractional ownership becomes seamless through blockchain divisibility, though many traditional brokers already offer fractional shares. Lower fees emerge through blockchain efficiency – Bitget advertises users pay only gas fees without brokerage commissions for stock token trades.
Despite the excitement, tokenized stocks face significant criticism from industry experts who question their fundamental value proposition.
Critics argue these tokens are essentially contracts for difference (CFDs) rebranded for the crypto era. As Anton Golub, the Chief Business Officer at Dubai-based crypto exchange Freedx bluntly stated, “It’s a wrapper… not real equity.” Token holders rely entirely on issuer promises and custody arrangements – if that trust chain breaks, there’s no direct recourse to underlying shares.
Liquidity concerns plague off-hours trading. While 24/5 access sounds attractive, market makers struggle to hedge stock exposure when underlying markets are closed. This creates artificial pricing with wide spreads during weekends and overnight sessions, potentially making the promised round-the-clock trading illusory when volumes disappear.
Europe leads adoption due to accommodating regulatory frameworks. The EU lacks accredited-investor restrictions preventing retail participation in security tokens, while jurisdictions like Lithuania (where Robinhood obtained its crypto license) provide EU passport access for cross-border services.
Kraken, Bybit, and KuCoin restrict tokenized equities to non-U.S. users, operating through entities in crypto-friendly jurisdictions. Switzerland’s regulatory clarity makes it attractive for issuers like Backed Finance to tokenize assets with proper legal backing.
U.S. markets remain closed to retail tokenized stock trading. SEC rules likely classify these tokens as securities requiring registration or accredited-investor limitations. Coinbase actively seeks SEC approval through no-action letters or exemptions to launch tokenized equity trading for American customers, potentially creating massive new business lines.
Tokenized stock adoption shows promising early signals despite nascent status. Backed Finance’s $300+ million trading volume in four weeks demonstrates genuine investor appetite, while Robinhood’s stock price surge upon tokenized equity announcement reflects market enthusiasm.
Real-world asset (RWA) tokenization Tokenization Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Tokenization represents the process of substituting a sensitive data element with a non-sensitive equivalent, i.e. token, which bears no extrinsic or exploitable meaning or value. In essence, the rights to the ownership of an asset are converted into a digital token. Tokenization can be used to own an entire unit of an asset. For example, one token that represents the ownership of a piece of real estate or to split ownership of a single unity of an asset such as 200,000 tokens, each one represen Read this Term projections are staggering – estimates suggest growth from $0.6 trillion in 2025 to $18.9 trillion by 2033. Even capturing a fraction of global equity trading could generate massive volumes for tokenized platforms.
Solana emerges as the preferred blockchain for tokenized stocks due to high throughput and low transaction costs. Kraken, Bybit, and Backed Finance chose Solana for xStocks, enabling fast settlement and DeFi integration capabilities.
Ethereum remains important through Layer-2 solutions like Arbitrum, which powers Robinhood’s tokenized equity platform. eToro plans ERC-20 tokenized shares on mainnet Ethereum, betting on network effects and DeFi ecosystem maturity.
Tokenized stocks enable novel investment approaches impossible with traditional portfolios. DeFi yield farming using equity tokens as collateral creates new income streams, while 24/7 trading allows responsive position management across global time zones.
Portfolio diversification benefits from seamless crypto-equity integration within single platforms. Investors can balance Bitcoin holdings with tokenized Tesla shares without multiple brokerage relationships or complex fund transfers.
Risk management requires understanding counterparty exposure, regulatory changes, and liquidity variations during off-hours trading. Dollar-cost averaging becomes possible through programmable blockchain transactions, enabling automated investment strategies.
Tokenized stocks represent early steps toward fully on-chain financial markets where traditional asset classes integrate seamlessly with crypto ecosystems. 24/7 global markets may become standard expectations as geographical and temporal barriers dissolve.
The question isn’t whether tokenized stocks will succeed, but how quickly traditional financial markets will adapt to blockchain-native investor expectations for seamless, global, always-on trading experiences.
