Recently, when I opened Twitter, the screen was full of US stock tokenization. It is no exaggeration to say that if you havent been discussing this issue in the past few days, it may mean that you are out of touch with the market.
U.S. stocks on the blockchain is the biggest hot topic in the market this week. Robinhood launched stock tokenization services in Europe, and xStocks also landed on Kraken and Bybit at the same time; Solana DEX and Arbitrum ecosystem began to list trading pairs such as AAPLx and TSLAx, and a new narrative of stock tokenization was quickly rolled out.
But if you only see the popularity and don’t understand the structure, then you may become the leek in this narrative.
In my opinion, stock tokenization is not essentially “issuing a token”, but a stress test of on-chain finance:
Can the Web3 world really support the issuance, trading, pricing and redemption of mainstream financial assets?
It’s not just a hype, it’s a structural stress test of on-chain finance
From my perspective, our industry narrative is constantly evolving. As early as 2019, Binance and FTX both tried to tokenize US stocks, but were eventually stopped by regulators. Mirror Protocol used synthetic assets to simulate US stock prices, but it also died with the collapse of Terra and SEC regulation. This is not a new thing, but the industry was not very mature at the time.
Today’s stock tokenization is not a grassroots experiment, but a compliant path led by licensed institutions such as Robinhood and Backed Finance. This is a critical watershed.
Take Robinhood as an example. The stock tokenization service it launched in Europe this time follows an unprecedented closed-loop path of brokerage proprietary operation + on-chain issuance.
They do not simply put a price on the chain, but Robinhood obtains a license in the EU, purchases US stocks, and issues 1:1 mapped tokens on the chain. From custody, issuance, to clearing and settlement, and user interaction, the entire process is connected, and the trading experience is basically close to the combination of a securities account + wallet.
In the early stage, they deployed these tokens on Arbitrum to ensure that the speed and cost of on-chain transactions were controllable. Later, they planned to migrate to their own Robinhood Chain, which means that they have to control the entire infra themselves.
Although voting rights cannot be opened yet in order to avoid governance-related supervision, the overall structure can already be seen in its initial form: it is like establishing an on-chain securities trading system that can operate almost independently at the structural level.
For the crypto industry, this is the first time that a traditional Internet brokerage firm has not only autonomy on the issuance side, but also deconstructs the on-chain structure of assets.
From grassroots experimentation to closed-loop compliance
The current round of stock tokenization is hot, just like what I have said before, it is not accidental. It is essentially the result of several core variables resonating at the same time. This is probably what is called the right time, right place, and right people.
First, there is a loosening of supervision and a clear direction. For example, Europes MiCA has been officially implemented, and the US SEC is no longer blindly hammering, but has begun to send some signals that it is possible to talk and do.
Robinhood was able to launch its stock token service in the EU so quickly thanks to the securities license it obtained in Lithuania; xStocks can be connected to both Kraken and Bybit, which is also inseparable from the compliance structure it has established in Switzerland and Jersey.
At the same time, as funds on the chain are indeed looking for new asset outlets, the structure of funds on the market has changed. The gap between the traditional financial market and the Crypto non-MEME market will only get smaller and smaller.
At present, there are a lot of projects on the chain that have no fundamentals but have super high FDV. The liquidity is piled up there with nowhere to go, and more stable funds are also starting to look for asset allocation outlets with anchors and logic. At this time, regular forces such as Robinhood and xStocks come in with compliant structures and trading experiences, and stock tokens have become attractive. It is familiar, stable, has narrative space, and can also be linked to stablecoins and DeFi.
The combination of TradFi and Crypto has gone deeper and deeper. From BlackRock to JPMorgan Chase, from UBS to MAS, traditional financial giants are no longer standing by and watching, but are really building chains, running pilots, and building infrastructure. As the most mainstream and well-known asset, stocks will obviously become the first choice for tokenization.
Is the putting traditional assets on the chain an opportunity for encryption or a threat to the project?
Jiayi Subjective opinion:
Looking ahead, stock tokenization is unlikely to be an explosive growth curve, but it is likely to become a highly resilient infrastructure evolution path in the Web3 world.
The significance of this narrative lies in that it has leveraged two important structural changes: first, the asset boundary has begun to truly migrate to the chain, and second, the traditional financial system is willing to use the chain to organize part of the transaction and custody process. Once these two things are established, they are irreversible.
So, is it a good thing or a bad thing for stocks to rush to grab the liquidity of Crypto projects?
In my opinion, this is a typical double-edged sword. It brings higher quality assets, but it will also subtly rewrite the flow structure of funds on the chain.
From the front:
1. The entry of traditional financial blue chip assets has given on-chain funds a new destination and added some options for the allocation of stable assets. In a market where narratives rotate too quickly and funds wander for a long time, this type of asset with a clear structure and a real anchor point is actually helping liquidity regain the basic coordinates of where to allocate and where to allocate.
2. This will also bring about a catfish effect. Once the strong narrative asset of US stock tokenization comes up, the benchmark of the entire chain will be raised, which will inevitably push the overall quality of Web3 projects to go up. Let the junk projects be eliminated by the market, honestly.
3. Crypto players can directly purchase stocks in the form of Cypto Native, reducing the liquidity drain of the US stock market on the Crypto pool
But looking at it the other way around:
1. It will also put pressure on crypto-native projects. Not only will the narrative be snatched away, but the capital structure and user preferences on the chain will also be slowly reshaped. Especially when the liquidity of tokenized stocks increases and perp, lending, and portfolio configuration begin, it will directly compete with native assets for stablecoin traffic, mainstream users, and attention on the chain.
2. For project owners: financing will become more difficult. When AAPLx, TSLAx, and possibly OpenAI or SpaceX’s tokenized private equity appear in the on-chain asset pool, investors and users’ intuitive judgments on “what is worth investing in” and “what has a pricing anchor” will shift.
Stock tokenization makes us rethink: Is Web3 a system that can carry mainstream assets and real trading behaviors? Can we use an open financial structure to rebuild a securities system with lower friction and higher transparency than the traditional market?
