What Are Tokenized Stocks? How Blockchain-Based Shares Work

Tokenized stocks are digital tokens that represent shares of public companies. They trade on a blockchain, the same type of ledger that supports cryptocurrencies. Until recently, they were mostly a product for investors outside the United States.

That is starting to change. In September 2026, the U.S. Securities and Exchange Commission (SEC) issued two five-year innovation exemptions that open a path for tokenized stock trading in the U.S. Early October brought new filings from exchange operators and crypto firms.

This article looks at the numbers behind the market. It covers market size, trading habits, volatility, fees, market share and the rules that shape access. The data comes from the IMF, Binance Research, Delphi Digital, the SEC and several news reports.

What Are Tokenized Stocks and How Do They Work?

A tokenized stock is a blockchain-based token that gives an investor exposure to a company’s shares. If the stock price rises or falls, the token’s value is designed to move with it. Some tokens match one share, and others match a fraction of a share.

Most tokenized stocks trading today are technically derivatives. They track a share price but do not give the holder every right that comes with owning the stock. In the future, tokens are expected to carry rights such as dividends and votes on shareholder proposals.

Martin Koopman, chief product officer at Hazeltree, owns tokens of Figure Technology Solutions. Figure issued the tokens itself, so they carry the same dividend and voting rights as its Nasdaq-listed stock. In October, he used Figure’s app to buy $10 of the stock, about a third of a share.

Ishmael Asad, a research analyst at Bitwise Asset Management, holds a GameStop token that only tracks the stock’s price. It came free from an app, and he cannot swap it for GameStop shares. The token is issued by a separate company and backed by shares held in custody.

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Asset-backed tokens usually move through four stages. The table below sums them up.

Synthetic tokens work in another way. They copy stock prices with derivatives, price feeds and smart contracts, and the issuer never holds the shares. That structure depends heavily on the quality of the price feed and carries more counterparty risk.

Binance Academy says checking how a token is backed is one of the most useful steps before using any product. The answer shapes the risks, the rights and the cost.

How Big Is the Tokenized Stock Market?

The market is growing, but it is still small. The International Monetary Fund (IMF) estimated the tokenized real-world asset market at about $65 billion as of July 31, 2026. Tokenized equities made up roughly $2.3 billion of that total.

That means equities were about 3.5% of the tokenized real-world asset market. The rest is mostly other assets, such as tokenized Treasurys and money-market funds.

The IMF compared the figure with a 2025 global equity market value of just under $160 trillion, based on data from the Securities Industry and Financial Markets Association (SIFMA). Against that total, $2.3 billion is about 0.0014%.

Large financial firms have already moved some products on-chain. BlackRock launched its USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain in 2024. The fund invests in cash, U.S. Treasury bills and repurchase agreements, and it is not tokenized equity.

Earlier tokenized equity deals were smaller. U.S.-based Quadrant Biosciences turned its equity into Quadrant Tokens and sold 17% of them. The company raised more than $13 million.

New venues are still entering the field. Bullish introduced tokenized equity trading in August. In early October, OKX and Intercontinental Exchange (ICE), which owns the New York Stock Exchange, filed plans for a venue that offers round-the-clock trading in tokenized U.S. shares.

When and How Do People Trade Tokenized Stocks?

The IMF studied the five most actively traded tokenized U.S. equities. They included Tesla, Nvidia and Alphabet, along with measures such as the Nasdaq 100 Index. The study covered centralized and decentralized venues.

More than half of the trading took place outside regular U.S. market hours. About 80% of trades were for less than one share. The IMF said these figures show that investors value 24/7 access and lower entry points, not just the technology.

The overnight data also carried information. Once U.S. markets opened, more than 85% of the overnight move in tokenized shares showed up in the traditional counterparts within five minutes. That suggests off-hours prices can hint at where the regular market will start.

Tokenized stocks also fit with other blockchain tools. They can be used as collateral or in liquidity pools on decentralized finance (DeFi) platforms. Binance Academy lists this as a benefit that regular brokerage accounts do not offer.

Round-the-clock trading is one reason supporters like the product. Blockchains do not follow exchange hours, so tokens can change hands on nights and weekends. Kraken, for example, operates its xStocks feature 24 hours a day on weekdays.

Small trades also point to a retail-style audience. Many users appear to be testing the product with low amounts rather than building large positions. The IMF data does not say who these traders are, only how they trade.

Fractional ownership is the other draw. An investor can hold a small slice of a high-priced stock in the same wallet as crypto assets. For people abroad, this also widens access to U.S. markets.

How Volatile and Liquid Are Tokenized Stocks?

The IMF found that tokenized stocks were about 1.5 times as volatile as the equivalent shares on traditional venues. It also found they were less liquid. In plain terms, prices move more, and it is harder to buy or sell large amounts without moving the price.

Thin trading during off-hours is a key reason. When users buy or sell more than the market can handle, prices can jump. The Wall Street Journal reported that tokens are often thinly traded at night, which leaves them open to sharp moves.

The IMF said the problem is not only size. Tokenization needs enough issuers, investors, venues and settlement assets on systems that work together. Today, the market is split across private platforms, public blockchains, custodians and settlement tools that often do not connect.

The IMF also named some benefits. Tokenization could replace some manual record checks, automate tasks such as dividend payments and speed up collateral transfers. Some bank executives have said tokenized money-market funds could act as fast collateral during periods of stress.

There is a flip side. The IMF warned that automated margin calls, collateral moving between platforms and 24-hour trading could make a market shock harder to contain. It said the risks remain small because the market is small.

What Do Tokenized Stocks Cost to Trade?

Trading fees on centralized platforms typically range from 0% to about 0.2% per trade. Decentralized swaps can cost closer to 1%. Wallet-based swaps for stock tokens have been reported at roughly 0.8% to 1%.

Fees are only part of the cost. Spreads, currency conversion fees, gas costs and withdrawal charges can add to the total. Currency conversion can add around 0.1% on some fiat-denominated trades.

Binance Academy notes that comparing the total cost gives a better picture than the headline rate. A platform with a 0% fee can still charge through its spread. Network fees can also change from day to day.

Supporters argue that the blockchain can cut out middlemen. They say this could lower trading costs and raise returns over time. The fee data so far shows a mixed picture, since costs depend on the venue and the type of trade.

Who Is Buying Tokenized Stocks, and Who Leads the Market?

Adoption is concentrated among crypto-native users. A Delphi Digital report found that about 88% of buyers already held other digital assets before their first tokenized stock trade. That points to a market built mostly on existing crypto users.

Binance launched bStocks in June 2026. They are tokenized 1:1 U.S. stocks that trade 24/7 and give indirect price exposure without a separate brokerage account. Delphi Digital found that bStocks made up roughly 28% of total tokenized stock value outstanding among the largest issuers as of July 2026.

Binance Research also reported on DeFi use. The bStocks utilization rate in DeFi has led the market since the end of July 2026. It stood at 11.2% in October 2026, compared with 7.4% for the wider tokenized stock market.

Other providers are active as well. According to the Blockchain Council, cited by U.S. News & World Report, xStocks from Kraken and Backed is the largest provider of tokenized equities. That claim and the Delphi finding use different measures, so the two should not be read as a direct ranking.

Access depends on where an investor lives. Retail participation can be limited by each platform’s license and by the laws in the investor’s country. Binance Academy advises checking a platform’s regulatory status in your region before trading.

Robinhood, Coinbase, Kraken and Gemini offer blockchain-based versions of U.S. stocks and exchange-traded funds to non-U.S. customers. Binance and MetaMask also let users swap stablecoins for tokenized stocks. Each platform sets its own regional limits.

What Are the U.S. Rules, and What Is Coming?

U.S. retail access is still limited. As of May 2026, U.S. News & World Report said it was not possible for U.S. retail investors to buy and trade tokenized stocks. U.S. investors could buy tokenized Treasurys or traditional fractional shares instead.

The SEC also acted on exchange plans earlier in the year. It approved Nasdaq’s rule change on March 18 to support trading of Russell 1000 Index stocks and major exchange-traded funds in token form. It approved the NYSE rule change on April 17.

Rules moved quickly during 2026. The timeline below lists the main steps reported in the source articles.

The September order is the biggest step for U.S. trading. It temporarily exempts approved trading venues and market makers from rules that blocked trading in tokens that represent listed shares. Tokens allowed under the exemptions must carry the same shareholder rights as regular stock, including dividends and proxy votes.

This requirement rules out, for now, the synthetic tokens that brokers and exchanges offer outside the U.S. It also includes a safeguard for companies. Before a venue trades a stock tokenized by a third party, it must give the issuer 30 days notice, and the venue cannot proceed if the company objects.

Not everyone supports the approach. Citadel Securities asked the SEC to use a notice-and-comment process to address investor protection and fair access. AMC Entertainment CEO Adam Aron also criticized Robinhood for offering tokens without the same shareholder rights, while Robinhood CEO Vlad Tenev said companies cannot control products created around their shares once public.

The SEC had paused an earlier plan for a broad crypto platform exemption. U.S. News & World Report said the pause came over corporate concerns about dividend tracking and shareholder voting. The September exemptions answer those concerns by requiring full shareholder rights.

Outside the U.S., the EU’s MiCA framework gives regulated issuers a compliance path. Singapore and Hong Kong have run pilot programs.

What Risks Do Investors Face?

Rights are the first issue. A synthetic token may give price exposure and nothing more. The figure below shows how the main product types differ.

Oversight is the second issue. Regulators have warned that tokenized assets could let bad actors engage in insider trading and market manipulation while avoiding oversight. U.S. exchanges use surveillance, and brokers must know their customers, but those controls do not currently exist for tokenized stocks.

Security is the third. Tokenized equity can be exposed to hacking, theft and other breaches. Investors who self-custody tokens can lose access for good if they lose their private keys or recovery phrase.

Smart contracts can automate dividends and voting, but the legal structure of the token still decides what rights a holder has. Rules on this are still developing, according to Investopedia.

Legal and structural risks come next. Custodian failures can affect the backing of a token. Laws also vary by country, so a product that is legal in one place may be restricted in another.

Investopedia notes that a token’s value can swing sharply in the early stages of adoption. The IMF says legal rules on ownership, liquidity safeguards, links between systems and settlement arrangements should be developed before the market grows much larger.

What the Data Shows

The numbers describe a young market with real demand. More than half of trading happens outside regular hours, and about 80% of trades are for less than one share. At the same time, tokenized stocks are about 1.5 times as volatile as the shares they track.

Tokenized equities total roughly $2.3 billion, a tiny slice of global stock markets. Rules are changing fast, with the SEC’s five-year exemptions and the DTCC service launch in October. How quickly the market grows will depend on liquidity, investor rights and the speed of new venue launches.

Sources

• Five Things to Know About Tokenized Stocks (The Wall Street Journal)
• What Are Tokenized Stocks? (Binance Academy)
• Tokenized Stocks: What They Are and What Investors Should Know Now (U.S. News & World Report)
• Tokenized Equity Explained: How It Works and Real-World Examples (Investopedia)
• IMF finds demand for tokenized stocks, says the market is still volatile, illiquid (CoinDesk)