Tokenized Public Equities
Tokenized public equities are blockchain tokens that track a listed company's shares and are sold as a way to hold and trade them on-chain, around the clock and across borders. In most current forms the token is not the share but a claim on an intermediary that holds the stock, and what the holder gets in dividends, votes and an insolvency depends on that intermediary's terms.
- Also known as
- Tokenised stocks, Stock tokens, On-chain equities
- Used at
- crypto exchanges and neobrokers offering US and European stocks to customers outside those markets — Kraken's xStocks and Robinhood's stock tokens in the EU (both launched in 2025), and earlier Binance's discontinued stock tokens (2021)
- Binding
- governed by the issuer's terms and by securities law where the buyer is — MiCA in the EU for the token, MiFID for the underlying right; the US SEC has not permitted retail tokenised stocks on the same basis
- Typical structure
- a special-purpose issuer buys the shares through a broker and issues one token per share, or a broker issues a token that is a derivative on the share's price; a smart contract handles transfer, a custodian holds the stock
- Typical gap
- dividends passed through as extra tokens or cash, but no voting rights, no direct shareholder claim, and trading hours that continue when the underlying market is closed and prices are unhedged
- Parties
- the issuer, the custodian, the exchange or broker distributing the token, the customer, and the listed company, which is not a party and did not consent
How tokenized public equities work in practice
The promise is access: a customer in Argentina buying Apple at 3 a.m. with a stablecoin, settling in seconds, holding a fraction of a share. The mechanism is a wrapper. An issuer buys the shares and holds them with a custodian; it mints tokens, one per share, and sells them through exchanges. The token trades on-chain among wallets; the issuer's contract says a token can be redeemed for the share's value, and dividends are paid to token holders as the issuer receives them. Some providers skip the share entirely and issue a contract for difference in token form, with the price fed from an oracle.
The rights are where the design shows. A shareholder of record can vote, receives dividends by law and has a claim on the company in insolvency. A token holder has a claim on the issuer, whose solvency, custody arrangements and jurisdiction determine everything. When OpenAI stated in 2025 that Robinhood's "OpenAI tokens" represented no interest in the company, it was making the point for the private-company version: the token is what the issuer says it is.
The regulatory question is whether the token is a security in the buyer's jurisdiction, and the answer is usually yes — so the products live where the issuer can be licensed and the buyers can be served, and stay out of the US. For M&A the interest is in the infrastructure: custody, issuance and compliance platforms that can tokenise a security properly are being acquired by exchanges and banks preparing for the day the shares themselves are issued on-chain.
Example
A European neobroker offers tokens on 200 US stocks. A customer buys 10 tokens on a $150 stock, $1,500, at 22:00 CET on a Friday, when the US market has been closed for six hours; the price is the last trade plus the issuer's spread. Over the weekend the company announces a profit warning; the token's price, set by on-chain trading with no underlying market open, falls 12% on thin volume before Monday's open, where the stock falls 8%. The customer sold in the weekend panic at a worse price than any shareholder could have. Later, a $0.25 dividend arrives as $2.40 in stablecoin, after the issuer's withholding and fee. The customer had access, fractional ownership and instant settlement — and no vote, no shareholder claim, and a counterparty in Liechtenstein.
Common mistakes
- Marketing a token as "owning the stock" when the terms say it is a claim on the issuer. - Trading around the clock without a mechanism to price the token when the underlying market is closed. - Custody arrangements that a holder cannot verify and an issuer's insolvency would test. - Assuming the token escapes the securities law of the buyer's country because it is on a blockchain. - For an acquirer, buying a tokenisation platform on its volume of wrappers rather than its licences to issue the real thing.