In the world of finance, access is often mistaken for inclusion. But as tokenised real-world assets (“RWAs”) move from concept to adoption, we must ask: Is access alone enough?
Tokenisation promises to open capital markets to broader global participation. It aims to make exposure to US equities, government bonds, and yield-bearing products as easy as owning stablecoins. But this transformation is not just about making old products faster or cheaper – it’s about rebuilding financial systems in ways that are more transparent, programmable, and equitable.
For stock tokenisation to succeed, it must go beyond idealism and confront operational, legal, and educational challenges head-on.
Stock tokenisation isn’t new
The idea of putting stocks on the blockchain isn’t some futuristic concept. In fact, it’s been tried before. During the 2020–2021 crypto boom, exchanges like FTX and Binance experimented with tokenised equities, hoping to give global users easier access to US markets.
In 2020, FTX partnered with German firm CM Equity to offer tokens backed 1:1 by shares of companies like Tesla and Apple. These ERC20 tokens gave global users, especially those in emerging markets, an easy way to gain exposure to US stocks. However, regulatory warnings from BaFin and the SEC deemed the products unlicensed securities, forcing FTX to shut them down.
Binance launched a similar offering in 2021 using the same model but also faced mounting regulatory pressure in several jurisdictions. The service was eventually discontinued.
These cases underscored a critical truth. The core barrier to tokenised stocks is not the technology but regulatory compliance. While demand and infrastructure exist, navigating the complex landscape of securities regulation remains the key challenge for widespread adoption.
A fragmented but evolving regulatory landscape
Today, regulatory approaches to tokenised stocks vary widely. In the US, the SEC maintains that tokenisation does not alter the underlying asset’s status as a security. Any tokenised equity offering to US users must comply with strict requirements, including broker-dealer and ATS licenses, qualified custody, and full disclosure.
In Europe, tokenised stocks fall under both MiFID II and the new MiCA regulation. While MiFID II governs all securities regardless of form, MiCA expands oversight to include certain asset-backed tokens. Pilot programs, such as those by Robinhood Europe, require careful structuring and regulatory exemptions.
In Asia and the Middle East, regulators like MAS, FINMA, and ADGM have created sandboxes for limited RWA tokenisation, primarily for qualified investors. As stock tokenisation is still a new financial instrument, regulators are open to market experimentation and are expected to adapt their frameworks as more real-world data emerges from ongoing pilots.
Not all tokenised assets are created equal
One of the challenges in today’s market is that the term “tokenised stock” can refer to vastly different mechanisms, each with unique trade-offs:
- Custodial-backed models (e.g., Backed Finance) offer tokens fully collateralised by real-world equities held in regulated custodians. These may provide some degree of economic exposure but often lack shareholder rights or dividend claims.
- Contract-for-difference (“CFD”) models, tokenised stocks provide synthetic price exposure without actual asset ownership. These instruments are typically used for short-term trading and represent a zero-sum game between the trader and the platform acting as the counterparty.
- DeFi synthetic models, powered by oracles and overcollateralised derivatives, enable permissionless and fully on-chain exposure to real world asset prices. However, they carry inherent risks, including oracle failures, collateral volatility, smart contract vulnerabilities, and the absence of backing by real-world assets.
For all the current mechanisms above, owning a piece of tokenised Tesla stock does not necessarily mean owning part of Tesla Company. In most cases, end users do not receive voting rights, dividends, or guaranteed redemption mechanisms.
As infrastructure continues to mature, this issue is expected to be mitigated over time. In the meantime, greater emphasis must be placed on educating retail users to ensure they fully understand the risks associated with the assets they are purchasing.
Building with accountability, not hype
As tokenised finance grows beyond early experimentation, industry stakeholders – including exchanges, infrastructure providers, and ecosystem enablers – must take collective responsibility for shaping its trajectory. The focus can no longer rest solely on narratives or trading momentum. What matters now is building infrastructure that balances openness with integrity.
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This includes auditability, clear asset linkages, permission-aware token standards, and regulatory-aligned stablecoin frameworks. Exchanges and infrastructure providers can play a pivotal role here – not only by offering global liquidity but by promoting responsible asset design, transparent disclosures, and risk-managed user access.
A more honest financial future
The future of RWA like tokenised stock is not just about faster rails or fractional access. It’s about making finance more understandable, more interoperable, and more resilient to abuse.
Yes, tokenisation expands who can participate. But participation must come with clarity. We must tell users not only what they own, but what they don’t. We must distinguish between exposure and entitlement, between liquidity and redemption, between freedom and fragility.
If we do this right, tokenised finance won’t just mirror traditional markets – it will complement and improve them. But to get there, we need more than momentum. We need standards, transparency, and a willingness to confront complexity.
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