The world of investing is rapidly expanding, and tokenized stocks offer a way to track the price of real-world equities in the form of tokens that can be bought and sold.
Tokenized stocks are widely offered outside of the U.S. by regulated cryptocurrency platforms like Kraken, Binance and Robinhood, but for retail investors in the U.S., strict regulatory frameworks mean that it’s not possible to buy and trade tokenized stocks at this moment in time.
Despite this, U.S. investors can gain access to tokenized U.S. Treasurys and can buy traditional fractional shares, the economic equivalent of tokenized stocks, just not in token form.
[Sign up for stock news with our Invested newsletter.]
In other parts of the globe, tokenized stocks can provide investors with fractional ownership and the possibility of around-the-clock trading. While U.S. regulators have actively explored pathways for domestic retail investors, the Securities and Exchange Commission (SEC) recently paused plans for a broad crypto platform exemption for tokenized trading over corporate concerns regarding dividend tracking and shareholder voting.
When fully realized, blockchain-backed equity trading offers advantages over traditional systems, including near-instant settlement and precise fractional tracking. However, because these assets must remain strictly compliant with U.S. securities laws, their use in decentralized finance remains restricted to institutional networks rather than public crypto apps.
But what actually are tokenized stocks, and how might you go about investing in them in the future? Let’s take a look at one of the global investment landscape’s most innovative wealth-building tools:
— What are tokenized stocks?
— How do tokenized stocks work?
— How would you buy tokenized stocks?
— How to get a taste of tokenized stocks.
— Who will offer tokenized stocks in the future?
— Should you eventually invest in tokenized stocks?
What Are Tokenized Stocks?
The term “tokenized stock” refers to a blockchain-based token that allows investors to gain exposure to a traditional equity.
This means some foreign investors can buy shares of companies such as Nvidia Corp. (ticker: NVDA) or Microsoft Corp. (MSFT) via tokenized stocks. These digital assets are designed to mirror the price of the assets that they are tied to, meaning that if the stock goes up or down, so too will the value of the token.
How does this work? Many issuers of tokenized stocks will have their own holdings of the real equities, and will lock them in custody and mint equivalent tokens on a blockchain network like Ethereum (ETH) or Solana (SOL). Because these networks work with smart contracts, they benefit from a rules-based structure when it comes to price movements and the buying and selling of tokens.
Tokenized stocks can vary depending on the asset that they represent and the issuer of the token, but they generally correspond to one share, or a fraction of a share, in the underlying equity.
While not all tokenized stocks represent legal ownership in a company, they are largely designed to provide price exposure or synthetic replication of stocks through derivatives. Some issuers can even incorporate dividends into the tokenized stocks they offer.
The custody of these tokenized stocks is typically managed by the platforms providing them, rather than the investors themselves, though some platforms allow withdrawal to self-custody wallets.
How Do Tokenized Stocks Work?
When tokenized stocks are issued on the blockchain to accurately track the value of a specific stock or equity, they can be created as a custodial-backed token, where the institution holds the underlying shares in reserve and issues corresponding tokens on-chain, or as a synthetic or derivative token that mirrors stock-price movements through other financial instruments or smart contracts. In the latter instance, the issuer of the tokenized stock does not actually own the underlying asset.
How Would You Buy Tokenized Stocks?
Buying a tokenized stock is more like purchasing cryptocurrency than traditional stocks and shares, and transactions are handled by a blockchain network rather than a traditional stock exchange or marketplace.
If you’ve ever traded cryptocurrency tokens, tokenized shares can be used with similar ease, and smart contracts are a binding way to enforce supply controls to ensure the value of your holdings.
Smart contracts are themselves self-executing computer programs that work alongside blockchains to meet predetermined terms without the need for any human intervention. This helps to ensure a level of security when using tokenized stocks.
[READ: 7 Best Cryptocurrency ETFs to Buy]
How to Get a Taste of Tokenized Stocks
Although many platforms like Kraken, Binance and Robinhood Markets Inc. (HOOD) offer exposure to tokenized stocks outside of the U.S., American retail investors are currently unable to buy tokenized versions of public stocks due to regulatory restrictions in place.
However, this situation could change soon, with the SEC’s recent approval of proposals from the Nasdaq and the New York Stock Exchange to list and issue certain blockchain-based digital tokens of traditional securities. The SEC formally approved Nasdaq’s rule change on March 18 to support the trading of stocks in the Russell 1000 Index and major exchange-traded funds in a blockchain-based digital token form. On April 17, the SEC also officially gave the nod to the NYSE’s rule change. But despite the approval of an institutional framework and even pilot programs with major financial entities via the Depository Trust & Clearing Corp. (DTCC), retail investors’ access to tokenized stocks in the U.S. is still very much a work in progress.
However, there are some options available now if you’re hoping to add tokenized assets to your portfolio:
Tokenized U.S. Treasurys
At present, the only way to access tokenized assets as a U.S. investor is through Treasurys, where it’s possible to purchase digital representations of government debt (real-world assets) backed by funds from issuers like BlackRock Inc. (BLK), Ondo Finance, WisdomTree Inc. (WT), Superstate and Franklin Templeton, though they all have their individual limitations and requirements.
Much like tokenized stocks, these Treasury tokens are offered on the blockchain through specialized broker-dealer platforms.
Institutional Access
Although there’s no access for retail investors to buy into tokenized stocks in the U.S., if you qualify as an accredited investor, you may be able to access highly regulated, institutional-grade, tokenized securities via certain third-party providers. Until regulatory details are ironed out, however, options remain a little limited.
Fractional Shares
Alternatively, you can still buy digital-style traditional fractional shares
of big companies without paying out the full share cost by using platforms from Robinhood, Webull Corp. (BULL) and Fidelity, for example.
Like tokenized stocks, traditional fractional shares support a wider range of flexibility for investors, but without the same blockchain-based benefits.
Who Will Offer Tokenized Stocks in the Future?
There are many compliant trading platforms that offer tokenized stocks outside of the U.S., with some stemming from the world of cryptocurrency trading to others that are more specialized institutional platforms to serve a variety of investor needs.
You can expect these providers to begin operating in the U.S. once the regulatory outlook has cleared. However, there’s no current timeline on when you’ll be able to trade tokenized stocks. The biggest providers outside of the U.S. are:
Kraken
One of the most popular resources for tokenized stocks is Kraken. One of the longest-serving cryptocurrency exchanges, Kraken offers an xStocks feature to trade tokenized shares of major U.S. companies and exchange-traded funds, or ETFs, with ease. According to the Blockchain Council, xStocks, developed through a partnership between Kraken and Backed, is the largest provider of tokenized equities.
The platform also operates on a 24-hour basis during weekdays, making it easy for eligible users to trade their tokenized stocks throughout the week.
Gemini
Another popular choice for foreign investors is Gemini, which allows eligible users to buy and sell fractionalized or whole tokenized U.S. stocks with no U.S. broker needed.
Binance
One of the world’s most famous cryptocurrency exchanges, Binance allows investors to buy and hold tokenized stocks by swapping them with their BNB Chain stablecoin balance in their Binance Wallet.
MetaMask
Similarly, international investors can use the MetaMask real-world asset (RWA) feature to swap their stablecoins directly for tokenized stocks on both the Ethereum and BNB blockchains, making the holding and trading of stocks similar to handling cryptocurrencies.
There are many other decentralized exchanges (DEXs), such as Raydium, that provide access to decentralized order books that facilitate tokenized stocks, but it’s always worth conducting due diligence before using a new platform.
Should You Eventually Invest in Tokenized Stocks?
Tokenized stocks are a far more functional way to invest, and they hold advantages that aren’t typically found in traditional stock trading. Settlements can be far quicker because they’re handled by smart contracts, and it’s also possible to undertake around-the-clock trading outside of traditional stock market hours because they’re held within the blockchain. This means you can react faster to real-world events.
In some cases, international investors can also earn yields on tokenized stocks in a similar way to cryptocurrencies, and their assets can even be used as collateral for lending and borrowing, opening the door to a range of DeFi services.
There’s also the benefit of fractional ownership, which could help you build your exposure to publicly traded companies without a large initial capital investment.
However, there are risks, and this one is perhaps the most critical: Tokenized public stocks aren’t yet available in the U.S. for retail investors, making this an emerging technology, which is inherently risky. Before diving in, due diligence is important when exploring these platforms.
More from U.S. News
10 of the Best Bank Stocks to Buy for 2026
7 Best Defense Stocks to Buy Now
7 Best Semiconductor Stocks to Buy for 2026
Tokenized Stocks: What They Are and What Investors Should Know Now originally appeared on usnews.com
