Tokenized stocks are the digital counterpart of traditional stocks, providing access to stock markets with minimal barriers. This innovation is changing the approach to investing, offering more flexible and accessible ways to own assets.
How do tokenized stocks work?
Tokenized stocks are digital tokens that represent ownership rights in the shares of large companies, such as Google, Apple, and Tesla.
This process, called tokenization, converts ownership rights to real-world assets into digital tokens using blockchain technology.
Unlike traditional ETFs*, tokenized stocks let you invest in a specific company without additional fees or intermediaries.
* ETF (Exchange-Traded Fund) — is an investment fund whose shares are traded on stock exchanges, like regular stocks. ETFs typically include a range of assets, such as stocks, bonds, or commodities, allowing investors to diversify their investments by purchasing a share of the fund rather than buying individual assets.
Unlike custodians, who typically store securities, blockchain performs the function of storing and accounting for ownership rights, ensuring security and reliability.
There are two types of tokenized stocks: backed, which are fully supported by assets, and synthetic, which track the value of the underlying asset using derivatives* and blockchain oracles*, such as Chainlink.
* Derivatives — are financial instruments whose value depends on the value of another asset, called the underlying asset. For example, options, futures, and swaps are typical derivatives.
* Blockchain oracles — are services that provide real-world data to blockchain systems. Since blockchain itself cannot access information outside its network, oracles offer data, such as market prices or exchange rates, which smart contracts on the blockchain use to execute various operations.
Advantages of tokenized stocks
- 24/7 Trading: Unlike traditional stocks, which are traded only during stock exchange hours, tokenized stocks are available for trading 24/7.
- Partial Ownership: Tokenized stocks can be divided into parts, making them accessible to smaller investors. Traditional stocks can only be bought in whole lots.
- Global Accessibility: Tokenized stocks allow you to invest in international companies, such as American ones, without restrictions related to geography or currency.
- Simplified Buying Process: To buy tokenized stocks, you only need a cryptocurrency wallet, whereas traditional stocks require going through complex registration processes via brokers or exchanges.
- Lower Transaction Costs: Because there the no intermediaries or additional fees when transferring tokens, transactions are cheaper and faster.
Disadvantages of tokenized stocks
- Blockchain-related Risks: Smart contract failures and blockchain network issues can affect the security of transactions.
- Regulatory Uncertainty: Since tokenized stocks are a relatively new instrument, there is a risk of regulatory restrictions that could impact the market.
Where to trade tokenized stocks?
The xStocks platform, launched in 2025 based on the Solana blockchain, provides the opportunity to trade tokenized stocks of large American companies. Over 60 tokenized stocks are available on the platform, which is integrated with major crypto exchanges such as ByBit, Kraken, Bitget, and Gate.io.