Tokenization of Stocks: Opportunities and Challenges Coexisting

Tokenization of stocks has been a concept for many years, evolving from the rise of STOs in 2017 to the current RWA craze. In the early days, STOs were seen as a compliant alternative to ICOs, but their development was slow for various reasons. During the DeFi boom in 2020, some projects attempted to create synthetic assets linked to stocks through smart contracts, but ultimately failed to gain widespread adoption.

Recently, with changes in the regulatory environment, the concept of RWA has once again attracted market attention. Unlike earlier models, the current stock RWA emphasizes issuing tokens that are 1:1 backed by real assets through a compliant framework. The market is still in its early stages, primarily focused on US stocks.

It is worth noting that Exodus Movement has become the first publicly listed company in the United States to tokenize common stock, obtaining SEC approval to migrate Class A shares to the Algorand blockchain. This marks a shift in regulatory attitude and brings positive signals for industry development.

In addition to Exodus, the Swiss company Backed Finance is also actively laying out in this field. The company allows users who have completed KYC to mint on-chain stock tokens using USDC, with actual stocks custodied by Swiss banks. Currently, Backed mainly issues two types of assets, CSPX and COIN, with a total amount of about 13 million USD.

The advantages of tokenized stocks include 24/7 trading, reduced costs for overseas investors, and the financial innovation potential brought by programmability. However, the pace of regulatory policy advancement and the widespread adoption of stablecoins remain significant challenges.

In the short term, listed companies can refer to the Exodus case to issue on-chain stock Tokens, enhancing their valuation. At the same time, high-dividend US stock tokenization products may attract the attention of yield-focused DeFi protocols. Although there are both opportunities and challenges, with the improvement of the policy environment and technological advancements, tokenized stocks are expected to play a greater role in future financial markets.