Imagine a future where the biggest US stocks like Tesla (TSLA) or Nvidia (NVDA) can be traded around the clock, with the transactions settled in seconds.
Momentum is building toward that vision. The crypto industry, along with Wall Street heavyweights, wants to bring tokenized stocks, or digital versions of traditional shares that are recorded on a blockchain’s digital ledger, into the mainstream.
Last month Nasdaq (NDAQ) asked regulators for permission to allow listed stocks to trade in tokenized form on its exchange. If the request is granted by the Securities and Exchange Commission, it would mark a pivotal step toward merging traditional finance with blockchain. The SEC opened the proposal for public comments in September, with a decision expected within 45 to 90 days of publication.
“Tokenization is like a freight train. It can’t be stopped, and eventually it’s going to eat the entire financial system,” Robinhood (HOOD) CEO Vlad Tenev said at a crypto conference in Singapore on Wednesday. Over the summer, the trading platform launched more than 200 US stock and ETF (exchange-traded fund) tokens in Europe.
Meanwhile, Wall Street firms ranging from Goldman Sachs to asset manager BlackRock have already rolled out tokenized money-market funds. BlackRock is also reportedly exploring the launch of tokenized ETFs.
“Every stock, every bond, every fund — every asset — can be tokenized. If they are, it will revolutionize investing,” BlackRock (BLK) CEO Larry Fink said in the company’s annual newsletter in July. “Markets wouldn’t need to close. Transactions that currently take days would clear in seconds.”
Supporters argue that tokenized stocks make trading more accessible to investors, enable exchanges of assets in just one blockchain transaction, and expand their use in lending or as collateral.
“These are financial tools that the retail investor is not used to,” said Kevin Rusher, founder of real-world asset borrowing and lending firm RAAC. “It lowers the barrier to entry.”
The market for tokenized real-world assets, which include stablecoins, bonds, real estate, and commodities, could swell from about $600 billion in 2025 to nearly $19 trillion by 2033, according to Boston Consulting Group and Ripple.
The rollout of some tokenized equity products abroad have had a rocky start.
Tokens tracking popular stocks like Apple (AAPL) and Amazon (AMZN) in Europe have struggled with thin liquidity, leading to prices diverging from those of actual stocks.
Concerns about third-party issuers have also surfaced.
