Author: 100y_eth
Compiled: AididiaoJP
Key Takeaways
Unlike the recently stagnant tokenized US Treasury market, the tokenized equity market is experiencing rapid expansion in both quantity and quality.
Players ranging from traditional equity infrastructure providers, fintech companies, crypto exchanges to Web3-native platforms all view tokenized equities as the next major opportunity in the RWA industry. In fact, there are multiple distinct paths to equity tokenization, and understanding their respective strengths, weaknesses, and positioning is crucial.
This article analyzes the strategies of players from diverse backgrounds, including Securitize, Ondo, xStocks, Robinhood, DTCC, NYSE, Nasdaq, and Coinbase.
All Eyes Are on Tokenized Equities
Today, regulators, banks, institutions, fintech companies, and nearly all major market participants show strong interest in tokenization. However, the term 'tokenization' truly becoming a focal point is a relatively recent phenomenon. The main driver behind the early growth of the tokenization market was undeniably US Treasuries. Their rapid adoption relied on three factors: the safety of US government debt, the relatively simple tokenization structure, and the high yields available at the time.
The tokenized US Treasury market grew from $701 million on January 1, 2024, to over $15 billion for the first time on April 17, 2026, representing an astonishing compound annual growth rate (CAGR) of approximately 3.81x. However, after surpassing $15 billion, the market has hovered around that level, showing a clear slowdown in growth. Given that a significant portion of the demand for tokenized Treasuries came from DeFi protocols or exchange margin use cases, the recent unfavorable market environment makes the demand stagnation unsurprising.
As the momentum for tokenized US Treasuries wanes, another tokenization segment is rapidly rising in both scale and quality—tokenized equities. The market has grown 6.5x, from $291 million on January 1, 2025, to approximately $1.9 billion currently, within a year and a half. At the industry level, whether it's Web3-native players like Securitize and Ondo Global Markets, financial companies like Robinhood and Coinbase, or financial infrastructure providers like DTCC, NYSE, and Nasdaq, they have either already launched tokenized equities or are actively preparing to do so.
What advantages do tokenized equities offer over the traditional stock market that make nearly all major US players see them as the next significant opportunity? At first glance, tokenizing stocks seems straightforward, but in practice, depending on the regulatory framework adopted, various tokenization structures emerge, each offering different benefits. To understand these differences, one must first clarify the SEC's classification framework for tokenized securities.
SEC's Classification Framework for Tokenized Securities
In January of this year, the SEC issued a statement proposing a classification framework for tokenized securities.
First, based on whether the tokenization is conducted by the security issuer itself or a third party, it is categorized into 'Issuer-Sponsored Tokenized Securities' and 'Third Party-Sponsored Tokenized Securities'.
Third Party-Sponsored Tokenized Securities are further subdivided: if the rights related to the underlying security itself are tokenized, it's 'Custodial Tokenized Securities'; if a separate tokenized product is issued that merely references the price, yield, events, or other characteristics of the underlying security, it's 'Synthetic Tokenized Securities'.
Synthetic types are then categorized by product type: if a third party issues an independent security (e.g., a debt security), it's a 'Linked Security'; if it involves entering into a derivative contract, it's a 'Security-Based Swap'.
Ultimately, under this framework, tokenized securities can be classified into the following four categories, which also apply to tokenized equities:
- Issuer-Sponsored Tokenized Securities: The equity issuer itself, or its designated agent (e.g., a transfer agent), directly tokenizes and operates the security. The issuer (or its agent) connects a blockchain or other DLT system to the official shareholder registry for maintaining shareholder records. This approach does not fundamentally alter the existing legal framework and directly complies with current securities laws. The biggest advantage is that all shareholder rights, including ownership, are inherited by the token. However, strict compliance requirements somewhat limit usability. Primary representatives: Securitize, Superstate, Figure.
- Custodial Tokenized Securities: A third party tokenizes the interest (indirect rights) in securities held at a depository (like DTCC) or broker-dealer. It similarly inherits all related rights but is highly reliant on existing stock market infrastructure; ownership remains indirect, offering relatively limited improvements over the traditional system. Primary representative: DTCC; Ondo recently used this method to tokenize IVV and MU.
- Linked Securities: A third party issues and tokenizes an independent security (e.g., a debt security) that provides synthetic exposure to the underlying stock. Token holders only gain exposure to price performance and do not inherit other shareholder rights. The biggest advantage is high flexibility for on-chain use. Primary representatives: Ondo, xStocks, Robinhood Stock Tokens.
- Security-Based Swaps: A third party issues a derivative contract providing synthetic exposure to the underlying stock and then tokenizes the contract. Like Linked Securities, it only provides exposure related to price, inheriting no other rights. Currently, almost the only major case is Robinhood Classic Stock Tokens.
Analysis of Major Tokenized Equity Platforms
Securitize: Taking the Most Direct Route
Securitize is currently the tokenization platform with the largest market share, with a tokenized RWA scale of $5.1 billion. Its flagship product is BlackRock's money market fund, BUIDL. Securitize holds SEC-registered broker-dealer, transfer agent, and ATS licenses and leverages these regulatory advantages to follow a 'Direct Tokenized Security' model. According to the SEC classification, this falls under 'Issuer-Sponsored Tokenized Securities'.
Recently, Securitize has also extended the same model to tokenized equities. When it listed its own stock SECZ via a SPAC, it used its own service to tokenize and issue $180 million worth of SECZ on-chain.
The advantages of this model are clear: existing stocks can be tokenized as-is while fully complying with current securities laws. Investors first directly register ownership of their shares, previously held through DTCC or brokers, via DRS. Then, Securitize, acting as the transfer agent, tokenizes these shares. The result is that the stock token shares the same CUSIP as the existing stock, inheriting not only economic rights but also all related rights like voting rights and claims on residual assets in bankruptcy.
However, precisely because the tokenized stock is essentially another form of the same security, it comes with corresponding drawbacks. Most importantly, the compliance requirements are stringent, and on-chain usage is relatively restricted. Unlike Ondo's or xStocks' tokenized equities, Securitize's stock tokens can only be transferred between whitelisted wallets that have passed KYC/AML checks, and on-chain interactions are only possible with a limited set of smart contracts pre-approved by the team.
How does Securitize enforce KYC/AML and other compliance requirements on-chain? The answer is the DS Protocol. This is a set of smart contracts developed by Securitize that uses code to enforce compliance throughout the lifecycle of a tokenized security (issuance, transfer, usage, voting, dividends). Four Pillars previously published an in-depth research report on the DS Protocol, which is also featured on Securitize's website. Readers interested in understanding how tokenized securities operate at the smart contract level can refer to that report.
Other platforms tokenizing equities in a similar manner include Superstate and Figure. They all act as transfer agents for tokenization. The key difference lies in the type of stock being tokenized: Securitize and Superstate tokenize shares identical to existing stocks via the DRS system, while Figure issues a separate blockchain-native class of shares and then tokenizes that portion.
Ondo & xStocks: Expanding the Ecosystem with Broad Accessibility
Ondo and xStocks employ a structure where, when a user places an order for a stock token, an offshore SPV acquires the underlying shares and then issues tokenized debt securities backed by those shares.
Taking xStocks as an example. It has a Jersey-regulated SPV—Backed Assets (JE) Limited. When a user requests the issuance of a stock token via the platform, this SPV purchases the underlying shares through US-based Alpaca Securities and holds them in a segregated account at a regulated custodian. Subsequently, the SPV issues independent debt securities backed by these shares, tokenizes them, and delivers them to the user.
This structure falls under the 'Linked Securities' category in the SEC classification.
Currently, Ondo has tokenized 406 different stocks with a total value of approximately $851 million; xStocks has tokenized 183 stocks, valued at about $482 million. Their market shares in the tokenized equity segment are 45.9% and 26.0% respectively, firmly holding the top two positions.
The key to their rapid growth lies in the broad accessibility enabled by their tokenization structure. Strictly speaking, they are not tokenizing the stocks themselves but rather tokenizing debt securities issued by a third party and backed by the stocks. Therefore, compared to the issuer-sponsored model that directly tokenizes existing shares, this type of structure faces less stringent compliance requirements for distribution and secondary trading. Users can more freely trade and use the tokenized equities issued by Ondo and xStocks on CEXs and on-chain DeFi protocols. For instance, with xStocks, anyone can trade using a Web3 wallet via the Jupiter DEX or deposit them into lending protocols like Kamino as collateral to borrow stablecoins.
However, this indirect tokenization also creates issues: even if the underlying asset is the same, tokens issued by different platforms are not interoperable, leading to fragmented liquidity. For example, both backed by NVIDIA stock, Ondo issues NVDAon, and xStocks issues NVDAx; the two are not interchangeable. Additionally, due to reliance on Regulation S, US investors and persons are unable to use these services.
To address these limitations, Ondo recently acquired Oasis Pro, gaining broker-dealer, ATS, and transfer agent licenses, moving towards a more compliance-friendly tokenization model. In fact, Ondo has already used these licenses to tokenize shares of the IVV ETF and MU stock held in brokerage accounts via the 'Custodial Tokenized Securities' model, demonstrating the possibility of operating multiple structures in parallel.
Robinhood: Can the Latecomer Gain Traction?
An important new player has entered the tokenized equity ecosystem—Robinhood. It actually already provided tokenized equity services to European investors through Classic Stock Tokens. However, under the SEC classification, that structure is a 'Security-Based Swap': Robinhood enters into a derivative contract with the user referencing a stock and then tokenizes the contract into a receipt token. The entire structure is highly closed, usable only within the Robinhood App.
On July 1, 2026, Robinhood launched a new Stock Tokens service. Its tokenization structure adopts the 'Linked Securities' model, almost identical to Ondo's and xStocks' approaches, with largely similar advantages and disadvantages.
While the structure is the same, the potential Robinhood brings is clear: its product DNA and massive existing user base. Concurrently with launching Stock Tokens, Robinhood also launched the Robinhood Chain mainnet, centered around Stock Tokens. US users can also deposit stablecoins into Morpho on the Robinhood Chain via the Robinhood App to earn 7% interest. Although entering the market later than Ondo and xStocks, with its product iteration capabilities and ecosystem expansion potential, Robinhood still has the opportunity to scale up rapidly.
DTCC, NYSE, Nasdaq: Signals of Financial Infrastructure Transformation
It's not just platforms and companies considering equity tokenization. Key settlement and trading infrastructure providers in the traditional stock market—DTCC, NYSE, Nasdaq—are also moving towards tokenization.
The DTC, a subsidiary of DTCC, has received a no-action letter from the SEC, permitting the tokenization of some securities held at DTC on pre-approved blockchains. DTC expects this to enhance collateral liquidity, extend trading hours, improve operational and settlement efficiency, and enable programmability and real-time auditing. On July 15, DTCC also conducted limited tokenization of securities like QQQ and SPY in a live securities infrastructure environment, successfully completing trades and collateral transfers.
The NYSE submitted a rule change proposal to the SEC in April 2026 to support DTC's tokenization pilot, allowing stocks to settle in tokenized form. Additionally, the NYSE is developing a new regulated exchange—the Digital Trading Platform—aiming to use blockchain infrastructure to enable 7x24 trading of US stocks and ETFs, with support for stablecoin funding. In March 2026, the NYSE also signed a Memorandum of Understanding with Securitize, designating Securitize as the first potential digital transfer agent for this new platform.
Nasdaq received SEC rule change approval in March 2026, allowing stocks in the DTC tokenization pilot to trade and settle in tokenized form on its exchange. Nasdaq is also collaborating with Payward, the parent company of Kraken, to design a gateway service enabling issuers and investors to transfer shares between the regulated Nasdaq market and the permissionless blockchain environment.
Coinbase: Which Path Will It Take?
The final player worth watching is Coinbase. It has not yet launched a tokenized equities service but has stated multiple times since last year its intention to do so. In February of this year, Coinbase launched 5x24 trading for traditional stocks in the US; at an event in June, it announced it would soon offer tokenized equities.
The industry is highly focused on what structure Coinbase will use to tokenize equities. Coinbase has stated that its service will not only ensure the tokens are 1:1 backed by real stocks but will also provide shareholder rights, though the specific structure has not been disclosed in detail. More crucially, it explicitly stated these stock tokens would be usable on-chain while not being available to US customers.
If adopting an issuer-sponsored structure, tokens typically inherit all shareholder rights, are open to US customers, but have relatively restricted on-chain usability. The combination of 'broad on-chain usability + exclusion of US customers' resembles the approach taken by third-party structures (like Linked Securities). It is worth monitoring which structure Coinbase ultimately chooses to tokenize equities and how it will leverage its own exchange infrastructure to expand the tokenized equity ecosystem.
Competing on the Same Battlefield
The goal of financial services is clear: to allow anyone, anywhere, anytime, to trade all types of assets through a single backend and frontend. On the surface, today's financial services seem close to this goal, but in reality, integration mostly happens on the frontend, while the backend remains fragmented.
Stocks, as one of many asset classes, are no exception. Robinhood, which started with stock trading; Coinbase, which started with crypto trading; traditional stock infrastructure providers DTCC/NYSE/Nasdaq; and Web3-native players like Securitize, Ondo, and xStocks—their tokenization structures and strategic directions differ, yet they are all moving towards the same North Star: tokenized equities.
What needs to be closely observed next is how the US and other jurisdictions view tokenized equities, how the regulatory framework evolves, and how these changes will reshape the competitive landscape for all parties. Also, whether tokenized equities can become the next major catalyst driving the expansion of the entire RWA sector after tokenized US Treasuries.
The Korean market is also worth watching: despite high retail trading activity, the development of the RWA industry has been relatively slow. How discussions around tokenized equities will unfold in Korea deserves ongoing tracking.
