What Are Tokenized Stocks? Bridging Wall Street and Blockchain
TL;DR Definition
Tokenized stocks are blockchain-based digital tokens that represent ownership or economic exposure to traditional company shares (like Apple or Tesla). Often backed 1:1 by real stocks held in custody, they enable fractional ownership, 24/7 trading, and global access – blending TradFi reliability with crypto efficiency.
How Does Tokenized Stock Work?
A regulated issuer (like Backed Finance) buys actual shares and locks them with a custodian. They then mint equivalent tokens on a blockchain (often Solana or Ethereum). Each token tracks the stock’s price in real-time via oracles. You hold the token in a crypto wallet, trade it on platforms, and can redeem for underlying shares (if allowed). Settlement is near-instant, whereas traditional markets often have to wait one day or two days to settle (T+1). In 2025, Crypto exchanges like Kraken and Bybit offer tokenised stocks like „xStocks“ with TVL in tokenized equities nearing hundreds of millions.
Comparison of Tokenized Stocks vs Traditional Stocks
Aspect | Tokenized Stocks | Traditional Stocks |
Trading Hours | 24/7/365 | Market hours only (e.g. 9:30–4pm ET) |
Fractional Ownership | Easy (buy 0.01 share) | Possible via brokers, but clunky |
Settlement | Instant or near-instant | T+1 (next day or sometimes the day after) |
Global Access | Wallet + crypto (often no KYC for non-US users) | Broker account, KYC, geographic restrictions |
Ownership Rights | Often economic exposure only (no voting/dividends) | Full rights (voting, dividends) |
Custody | Self custody (crypto wallet) | Brokerage account |
Backing | Usually 1:1 real shares in custody | Direct shares |
How Is It Different from Equity Perpetuals?
Equity perpetuals (or Equity Perps) are synthetic derivatives on crypto exchanges that allow users to get exposure to traditional stocks or indices with leverage (up to 20x on BitMEX). These derivatives have no expiry, are cash-settled in crypto (USDT), and utilise funding rates to anchor the price. Unlike Tokenized Stocks, you do not own or have the rights to redeem the actual shares, you are speculating on the price of the equity. With Equity Perps, traders can also bet against the stock price and short the equity. Tokenized stocks aim for real backing and ownership-like exposure. They are usually held without leverage in spot form and focus on holding or trading the „asset,“ whereas Equity Perps are focused on directional betting.
What Are the Risks Involved in Tokenized Stocks?
Counterparty & Custody Risk: If the issuer or custodian fails, your tokens could lose backing.
Regulatory Uncertainty: Various jurisdictions ban or restrict tokenized stocks with sudden delistings possible.
Smart Contract & Platform Hacks: Smart contracts can contain bugs that hackers can exploit.
Liquidity & Price Divergence: Thin markets cause slippage or gaps from underlying stock.
No Full Rights: Rarely include voting or full dividends. Tokenised stocks in this case would act more like derivatives.
Scams/Fakes: Unregulated issuers might not back tokens properly.
FAQs
Are tokenized stocks safe?
They are generally safer than pure crypto, providing they are issued from reputable and licensed issuers (audited, 1:1 backed). However, they still carry substantial risks such as custody failure or hacks remain. It’s best practice to stick to regulated platforms; they’re not FDIC-insured like bank accounts.
What is Tesla tokenized stock?
Tokens like TSLAX (on Kraken/Bybit via Backed Finance) track Tesla’s price 1:1, backed by real TSLA shares. Allowing users to trade Tesla 24/7 with crypto and buy fractions of the share.
Who is BlackRock using for tokenization?
Securitize, a regulated brokerage firm and tokenization platform, powers BlackRock’s BUIDL fund (tokenized Treasuries, $2.5B+ AUM in late 2025) and other RWAs. BlackRock expanded BUIDL to chains like BNB.
What is an example of tokenized securities?
BlackRock’s BUIDL (Treasuries), Backed Finance’s xStocks (AAPL, TSLA, NVDA), Ondo/Robinhood offerings, or private ones like SpaceX/OpenAI tokens.
Who issues tokenized stocks?
Specialized firms like Backed Finance (Switzerland), Securitize (US), or platforms partnering with custodians. Exchanges like Kraken/Bybit distribute them.
Who is the leader in tokenization?
BlackRock dominates institutional RWAs (BUIDL largest fund), while Backed Finance leads public stock tokens (~90% market via Chainlink data). Securitize and Ondo are close contenders in 2025.
Tokenized stocks aren’t replacing traditional markets overnight, but in 2025 they’re making equities more accessible and efficient – especially for global, crypto-native investors. Exciting progress, but due diligence is key.
BitMEX Blog
