Tokenization of Stocks: Opportunities and Challenges Coexist

With the changing policy environment, tokenized stocks have once again become the focus of the crypto industry. This article will review the development history of tokenized stocks, analyze the current market situation, and discuss the opportunities and challenges they face.

The Development of Tokenized Stocks

The concept of tokenized stocks can be traced back to the rise of STO( security token offerings in 2017. STO aims to digitize the rights of traditional financial securities and put them on the blockchain, combining the compliance of traditional securities with the efficiency of blockchain technology. Tokenized stocks, as an important category of securities, have always been one of the most关注的应用场景 in the STO field.

Before the STO, the blockchain field mainly relied on ICOs for financing. ICOs quickly developed due to the convenience of Ethereum smart contracts, but most projects issued tokens that did not represent real asset rights and lacked regulation, leading to many problems. In 2017, the U.S. SEC issued a statement regarding the DAO incident, indicating that certain tokens might qualify as securities and should be regulated. This marked the official emergence of the STO concept.

In 2018, the concept of STO as "compliant ICO" gradually became popular. However, due to the lack of unified standards, poor liquidity in the secondary market, and high compliance costs, market development has been slow.

During the DeFi Summer of 2020, some projects began to experiment with decentralized solutions to create derivatives linked to stock prices. This synthetic asset model does not directly hold U.S. stocks, allowing it to bypass expensive regulatory and legal costs. Synthetix and Mirror Protocol are representative projects in this space. However, the trading volume of on-chain synthetic U.S. stocks has been less than satisfactory, and most projects later shifted to other business scenarios.

Apart from synthetic assets, some well-known exchanges have also attempted to provide cryptocurrency users with U.S. stock trading services through a centralized custody model. Both FTX and Binance had launched tokenized stock trading but ceased operations due to regulatory pressure.

As the market entered a bear market, the sector once fell into stagnation. It was not until the recent change in the policy environment that the market regained interest in tokenized stocks, but at this point it had a new name - RWA) Real World Assets(. This model emphasizes the issuance of tokens on-chain backed 1:1 by real assets through a compliant framework design, strictly adhering to regulatory requirements at each stage.

![The pro-crypto policy drives the narrative of RWA in the US stock market, interpreting the opportunities and challenges of tokenized stocks])https://img-cdn.gateio.im/webp-social/moments-fcb8221360c00c36b9bd15957a95f1fa.webp(

Current Market Status of RWA Stocks

The current stock RWA market is still in its early stages, primarily focused on U.S. stocks. According to the data, the total issuance in the current stock RWA market has reached $445.4 million, of which $429.84 million comes from EXOD, the on-chain stock issued by Exodus Movement. Exodus is a software company focused on developing self-custody cryptocurrency wallets, and its stock is listed on the New York Stock Exchange, allowing users to migrate Class A common stock to the Algorand blockchain for management.

Exodus has become the only company in the United States to tokenize common stock on the blockchain, which is of landmark significance. This indicates a clear shift in the SEC's attitude towards on-chain stock assets. Exodus's on-chain stock program has undergone multiple applications and improvements, ultimately receiving SEC approval in December 2024 and successfully going on-chain, which also propelled the company's stock price to a historic high.

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Except for EXOD, the remaining market share of approximately $16 million mainly comes from the Backed Finance project. This Swiss company allows users who pass KYC to mint on-chain stock tokens with USDC in the official primary market through a compliant framework. Backed will convert the received crypto assets into USD, purchase the corresponding stocks in the secondary market, managed by a Swiss custodian bank, and then mint bSTOCK tokens 1:1 to send to users. On-chain investors can directly purchase these assets through DEX.

In terms of issuance volume, Backed is mainly concentrated on two assets: CSPX and COIN, with the former having an issuance volume of about 10 million USD and the latter about 3 million USD. On-chain liquidity is primarily concentrated on the Gnosis and Base chains, with bCSPX liquidity around 6 million USD and wbCOIN about 1 million USD. However, the trading volume is not high; for example, since the deployment of the largest liquidity pool of bCSPX in February 2025, the cumulative trading volume has been about 3.8 million USD, with approximately 400 transactions.

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Another noteworthy progress is from Ondo Finance. The project announced its overall strategy for Ondo chain and Ondo Global Markets in February 2025, with tokenized stocks being one of its core trading targets. With a broader range of traditional financial resources and technological background, Ondo is expected to accelerate the development in this field.

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Opportunities and Challenges of Stock RWA

Stock RWA is typically considered to have the following advantages:

1. 7x24 hours trading: The characteristics of blockchain technology enable it to operate around the clock, breaking through the time constraints of traditional exchanges and fully tapping into trading demand.

2. Low-cost access to US assets for non-US users: By utilizing stablecoins, non-US users can directly trade US assets, avoiding cross-border fees and time costs.

3. Composability brings financial innovation: Tokenized stocks can be integrated into the DeFi ecosystem, possessing stronger on-chain financial innovation potential, such as on-chain lending scenarios.

![The pro-crypto policy promotes the narrative of RWA in the US stock market, interpreting the opportunities and challenges of tokenization of stocks])https://img-cdn.gateio.im/webp-social/moments-13c9e9cc00922937d36cdd59174b20ad.webp(

However, the current tokenization of stocks still faces two aspects of uncertainty:

1. Speed of Regulatory Policy Advancement: Currently, the policies have not yet effectively addressed the "equal rights for stocks and coins" issue, which restricts many trading scenarios and financial innovations. Progress is highly dependent on the speed of regulatory policy advancement.

2. Stablecoin Adoption: The main target users for tokenized stocks are traditional non-U.S. investors. For these users, whether the adoption of stablecoins has increased is also a key factor, which is closely related to the stablecoin policies of various countries.

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In summary, there may be the following two market opportunities for stock RWA in the short term:

1. Listed companies reference the EXOD case to issue on-chain stock tokens, enhancing company valuation. This is especially suitable for companies that can provide on-chain asset management services, as it can convert investors into product users, increasing business growth potential.

2. Tokenization of high-dividend US stocks may be favored by yield-generating DeFi protocols. As market sentiment reverses and native DeFi yields decline, yield-generating protocols need new real yield scenarios to enhance competitiveness. High-dividend blue-chip stocks have characteristics such as low volatility and strong resistance to economic cycles, making them controllable in risk, and they may be adopted.

![The U.S. stock RWA narrative driven by the pro-crypto policy, interpreting the opportunities and challenges of tokenized stocks])https://img-cdn.gateio.im/webp-social/moments-90408e36c956b1901b89bca5562014ec.webp(