Tokenized Stocks: What They Are—and What They Aren’t

Tokenized stocks—sometimes called “xStocks”—are blockchain-based digital representations of real-world equities. Issued on networks like Solana, Ethereum, or Polygon, these tokens track the price of public (and sometimes private) companies and can be traded 24/7 in fractional amounts. However, these instruments rarely convey direct share ownership. Instead, most use a legal wrapper—typically a Special Purpose Vehicle (SPV)—that holds the underlying stock, while token holders receive only derivative-like rights.

Big Platforms, New Approaches

  • Robinhood Europe (2025): Launched over 200 tokenized stocks and ETFs—including giants like OpenAI and SpaceX—via a third-party blockchain solution built on SPVs. Trading is 24/5, fee-free, but there’s no legal claim to shares or voting rights. Major issuers publicly distanced themselves from these tokens, underlining legal uncertainty.
  • Kraken & xStocks: In partnership with Swiss-based Backed Finance, Kraken lists tokenized Apple, Tesla, and Meta on Solana, using Chainlink “Proof of Reserve” to assure 1:1 backing. These xStocks can be held natively, traded, or used as DeFi collateral (e.g., Kamino, Raydium, Jupiter).
  • Bybit & Bitget: These exchanges joined the xStocks Alliance, offering tokenized equities on BNB Chain and Solana, with a focus on flexibility and DeFi integration. Legal clarity, however, is still a challenge.
  • Gemini & Dinari: Gemini takes a regulatory-first approach, issuing MiFID-II-compliant tokenized stocks in the EU, with strict reporting and clear legal structures.

Wall Street to Web3: The DeFi Integration

The real draw for tokenized stocks is their integration into decentralized finance. On Solana, xStocks can serve as:

  • collateral for loans (e.g., Kamino);
  • tradeable assets on DEXs like Raydium and Jupiter;
  • liquidity pool components or paired with stablecoins.

This opens up new strategies—automated pair trading, arbitrage, hedging—blurring the lines between traditional assets and DeFi. But it also raises key questions: How resilient are these protocols under stress? Who is liable in a system crash?

Private Markets: Democratization or Overreach?

Robinhood’s move to tokenize private companies like OpenAI and SpaceX is controversial. While these assets were once exclusive to institutional investors, retail can now buy exposure via blockchain tokens. But neither OpenAI nor SpaceX have endorsed the process, and token holders have no direct claim on the company—everything runs via third-party contracts. Former SEC chair Jay Clayton calls these offerings “unregistered derivatives with questionable value.”

Regulation: USA vs. Europe

The US SEC remains hesitant to greenlight tokenized equities, while Europe is forging ahead:

  • MiFID-II permits tokenized securities under strict conditions.
  • Germany is piloting digital exchange infrastructure via the DLT Pilot Regime.
  • Switzerland and Liechtenstein are regulatory sandboxes for custody models like Backed Finance.

As a result, most providers are based in regulation-friendly jurisdictions such as Switzerland or Liechtenstein.

Democratization with Caveats

Tokenized stocks lower the barriers to entry, offering global, round-the-clock access and DeFi features. But they are not real shares: voting and dividend rights are usually limited or non-existent, and ownership structures can be opaque. Whether this is a financial revolution or simply technical packaging depends on future transparency, regulation, and system resilience. For traditional investors, the stock market may not become truly democratic—but it is getting more accessible.