Tokenized stocks: a digital revolution in stock markets

What are tokenized stocks, and how do they work?

Tokenized stocks are digital equivalents of traditional stocks traded on stock exchanges. In this context, tokenization refers to the process of converting ownership rights of tangible assets, such as stocks in companies like Google, Apple, Tesla, and others, into digital form.

Some experts draw parallels with exchange-traded funds (ETFs)*, which make stock trading more accessible to retail investors. However, unlike ETFs, tokenized stocks provide access to specific financial instruments rather than a set of stocks and do not involve additional commission fees.

* An Exchange-Traded Fund (ETF) is a fund that combines various assets (such as stocks, bonds, or commodities) and allows investors to buy shares of the fund. This enables investing in multiple assets at once without the need to purchase each asset separately. For retail investors, ETFs are particularly convenient because they provide access to diversified investments at minimal cost, reduce risk, and save time on managing individual assets.

Thus, tokenized stocks provide ownership rights to regular stocks but without the need to use the services of custodians. Custodians traditionally handle the storage of securities, such as stocks, for their owners, ensuring security and record-keeping of ownership. However, in the case of tokenized stocks, all these functions are performed by blockchain technology. Blockchain provides secure storage and tracking of rights to digital assets, including tokenized stocks, without the need for third-party intermediaries like custodians.

These tokenized stocks are secured because their value and ownership rights are protected through blockchain technology.

However, there are also unsecured, or synthetic, tokenized stocks, which only track the price of the underlying asset they are tied to and use derivative financial instruments. Pricing data is typically provided by providers in the form of blockchain oracles*, such as Chainlink.

* Blockchain oracles are external services that provide real-world data to blockchain systems. Since blockchain cannot access information outside its network, oracles bridge the gap between blockchain and external data sources.

Each tokenized stock is represented as a token on the blockchain. This allows holders to store, exchange, and transfer tokenized stocks to other users without restrictions, unlike traditional securities.

What are the advantages and disadvantages of tokenized stocks?

The main advantage of tokenized stocks over traditional stocks is the ability to trade around the clock, like cryptocurrencies. Unlike traditional stocks, which are traded on stock exchanges only during certain hours on weekdays, tokenized stocks are available for trading 24/7, including weekends and holidays.

Moreover, tokenized stocks can be bought and sold not only on traditional exchanges but also on decentralized exchanges — directly from a non-custodial wallet, without depositing funds into the platform.

Another advantage of tokenized stocks is fractional ownership. Like other cryptocurrencies, such as Bitcoin and Ethereum, tokenized stocks are divided into units, usually up to 100,000,000. This distinguishes tokenized stocks from traditional ones, which can only be bought and sold in whole lots, making them more accessible to smaller investors.

Another benefit of tokenized stocks is global accessibility, including the U.S. market, which attracts investors with its leading international companies, high liquidity, and stability.

Another advantage of tokenized stocks is the simplified purchase process. To acquire traditional stocks, investors typically need to register with a stock exchange or a broker. This process may involve identity verification, the provision of various documents, and possible restrictions based on country of residence or citizenship. In some cases, registration may require knowledge of English, having international banking details, and other specific requirements that can create barriers for some users. Additionally, many traditional brokers charge high commissions, making investments less accessible for those with limited capital.

With tokenized stocks, these barriers are significantly reduced or eliminated. Since tokenized stocks operate on blockchain technology, they are accessible through decentralized platforms and cryptocurrency exchanges that do not require complex registration or intermediaries. To acquire tokenized stocks, all you need is internet access and a cryptocurrency wallet. This opens the market to investors worldwide, including those who cannot invest in traditional stocks due to geographical or financial restrictions.

Furthermore, buying traditional stocks is generally not available with cryptocurrency. However, tokenized stocks can be purchased with other digital assets, such as BTC or USDT.

Finally, tokenized stocks reduce transaction costs when transferring assets, requiring only a crypto wallet and no intermediaries. In contrast, the transfer of traditional stocks involves brokers, clearing organizations*, and custodians, who charge additional fees for their services.

* Clearing organizations are companies that perform settlement and final verification of transactions on the stock market. Their task is to ensure that each party to a deal fulfills its obligations and to resolve potential disputes between participants.

However, tokenized stocks also have their drawbacks, primarily related to the functioning of the blockchain networks themselves. For example, risks include failures in smart contract operations. Additionally, tokenized stocks, like stablecoins, are subject to risks related to potential loss of parity (de-pegging) with the underlying asset.

It is worth noting that tokenized stocks are a relatively new phenomenon in the crypto market, which may create regulatory uncertainty and additional legal risks for investors.

Where to trade tokenized stocks?

In June 2025, the xStocks platform was launched, offering tokenized stock trading services. xStocks operates on the Solana blockchain. The platform provides access to over 60 U.S.-listed, tokenized stocks, including Apple (AAPL), Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA).

The issuer of the tokenized stocks is the Swiss company Backed Finance, which has been operating since 2021 and provides real asset tokenization (RWA) services.

The xStocks platform has already been integrated with major crypto exchanges, including Bybit, Kraken, Bitget, and Gate.io. Tokenized stocks are also available in the Telegram Wallet, Trust Wallet, and OKX Wallet.

Additionally, tokenized stocks from xStocks can be traded on decentralized exchanges such as Raydium and Jupiter, as well as on the token launch platform Moonshot.