The bold new push to move global stock markets onto the blockchain faces tough hurdles — and regulators are watching. As crypto titans like Coinbase and Kraken gear up to tokenize global stock markets, hopes of faster, borderless trading collide with legal and regulatory obstacles. Will blockchain finally rewrite the rules of Wall Street?
After transforming currency and reshaping money markets, the world’s crypto disruptors are now taking aim at the towering heart of global finance — the stock market.
Years after early blockchain stock experiments fizzled under regulatory heat and technical setbacks, a new generation of crypto heavyweights is mounting a renewed assault on the world of equities. Companies like Coinbase, Kraken, Robinhood, and a wave of nimble startups are determined to push stock trading onto decentralized blockchain networks, promising a radical upgrade to the way global markets operate.
The vision is bold: buying or selling shares of Apple or Tesla could soon be as seamless as sending a text. The cumbersome settlement periods of traditional markets would vanish, replaced by instant, round-the-clock transactions, unhindered by borders or bank holidays.
But beneath the ambitious rhetoric lies a tangled web of challenges. Tokenizing stocks — converting real-world shares into blockchain-based digital assets — is far more complex than minting digital art or even cryptocurrencies. Every token requires backing by a real share, securely held by regulated custodians. And unlike crypto coins, stocks come wrapped in layers of legal protections, ownership structures, and regulatory safeguards that keep global markets functioning.
“You’re not just changing the format of an asset,” explains Bryan Routledge, associate professor of finance at Carnegie Mellon University’s Tepper School of Business. “You are changing the way things are trading.”
Despite these obstacles, the industry’s appetite is growing. Kraken’s Bermuda-based arm is set to launch tokenized stocks this month. Robinhood is preparing a similar rollout in Europe. Startups like Ondo Finance and Dinari are gearing up to introduce tokenized equity platforms, while Galaxy Digital is in talks with regulators to digitize its own shares.
At the centre of this push is Securitize, a blockchain securities platform that recently helped BlackRock digitize a money-market fund. Its chief operating officer, Michael Sonnenshein, confirms that conversations with asset issuers — including those considering on-chain IPOs — are accelerating.
In its simplest form, a token acts as a digital receipt, verifiable proof of ownership for one real-world share. The safest systems allow tokens to be redeemed for the underlying stock, keeping prices aligned. But not all setups guarantee that convertibility, leaving some tokens as little more than IOUs dependent on issuer integrity.
Tokenized stocks form part of a wider $2 trillion global effort to bring real-world financial assets onto blockchain networks, according to McKinsey & Co. So far, success has centred on simpler assets like U.S. Treasurys and money-market funds, where major players including BlackRock and Citigroup have embraced the efficiencies of blockchain technology. But applying the same to equities — with their mergers, splits, and shareholder votes — is a far greater challenge.
The political climate may now be tilting in crypto’s favour. With Donald Trump back in office, proponents hope regulatory barriers will ease. Hester Peirce, head of the SEC’s crypto task force, has recently voiced support for controlled “sandbox” trials that allow companies to test tokenized stock platforms under relaxed rules.
“Innovating firms are able to get to market quickly under appropriate, reasonably calibrated conditions,” Peirce said during a speech in May, highlighting the outdated nature of some regulations that predate blockchain technology.
Yet, caution remains. Memories of failed blockchain stock projects linger — from Overstock’s 2015 attempt to Exodus Movement’s limited success tokenizing its shares in 2021. Today, tokenized stocks account for just $388 million — a microscopic fraction of the $120 trillion global equities market.
More troubling precedents exist, including the Mirror Protocol’s collapse on the Terra blockchain, which triggered $40 billion in losses and SEC scrutiny.
Established market players like the Depository Trust & Clearing Corp. (DTCC), responsible for settling most U.S. stock trades, are moving slowly. DTCC plans a limited pilot program involving a small group of institutional players later this year.
“We have no desire to do this in a big bang,” says Nadine Chakar, DTCC’s global head of digital assets.
Still, for crypto-native investors, the appeal is clear. In countries with unreliable financial systems, direct blockchain access to U.S. stocks could be transformative. Proponents dream of 24-hour trading, instant settlement, and the ability to use stocks as collateral within decentralized apps.
But critics question whether this is genuine innovation or simply another flashy product in crypto’s constant hunt for new revenue streams. With fractional shares and near-instant settlement already commonplace in the U.S., it remains unclear whether mainstream investors are truly clamouring for tokenized stocks.
Nonetheless, the battle lines are drawn. Crypto is riding a $3 trillion bull market, a friendlier White House, and fresh technological momentum. Whether tokenized equities will finally dethrone traditional Wall Street systems — or remain a niche experiment — remains to be seen.
“It definitely will be competition,” Routledge concludes. “If you look at the growth of trading in cryptocurrencies, it was this analog of tokenization that really lit the fuse.”
