The SEC evaluates the trading of tokenized stocks on regulated exchanges: market estimated at 31 billion dollars, opportunities and risks for investors and platforms recently, in an evolving context.
Milan — September 2025 — The SEC is exploring a pathway to allow the trading of tokenized stocks on regulated exchanges, a move that could pave the way for a new market infrastructure.
In this context, the move, reported by The Information, taps into a segment already estimated at 31 billion dollars and rapidly expanding according to public dashboards like RWA.xyz.
According to data gathered by our editorial team and analysis of on-chain dashboards, bonds and funds continue to represent the largest share of the tokenized market, while stocks remain around 2% of the total; this composition is also confirmed by sector reports and discussions with market operators.
The analysts we spoke with note that, despite the pilots from 2021–2024, institutional adoption has remained cautious in the absence of regulatory clarity.
SEC: towards trading of “tokenized equities” on blockchain
According to The Information, the agency is developing a preliminary plan to allow the trading of equities registered on blockchain within crypto platforms with appropriate licenses.
The project is in its early stages and requires regulatory changes and supervisory guidelines, elements that need to be carefully calibrated.
At the moment, the SEC has not yet published final drafts on the subject; however, public discussions and consultations continued in 2024–2025, with Chairman Gary Gensler repeatedly stating that the institution is “technology-neutral” and that investor protection remains central, a principle reiterated in the most recent public statements in 2025.
Quick Definitions
- Tokenization: on-chain registration of economic rights or ownership related to a real asset.
- Tokenized stocks: tokens that represent shares of stocks or economic rights linked to equity securities, reconciled with traditional ledgers.
- KYC/AML: identification and anti-money laundering procedures required for access to regulated markets, in line with current practices.
- Custody: secure storage of digital assets with qualified custodians, featuring controls and segregation.
Key numbers: market at 31 billion, stocks ~2%, growth in the last 100 days
The size of the tokenized market is estimated to be around 31 billion dollars by September 2025, considering bonds, Treasuries, funds, and other on-chain assets (aggregate estimate from public dashboards like RWA.xyz and industry reports).
In this context, tokenized stocks represent about 2% of the total tokenized market, a share that is growing but still limited compared to bonds and funds, based on on-chain values (TVL/market cap) of major authorized networks.
In the last 100 days – from May to September 2025 – the value of tokenized stocks is estimated to have grown significantly compared to the previous quarter, according to public datasets from RWA.xyz updated as of September 30, 2025.
Furthermore, if just 1% of global equity were tokenized, the market could exceed 1.3 trillion dollars according to a recent analysis by Binance Research, with potential that remains to be verified in practice.
How the Exchange of Tokenized Stocks Would Work
Each token would represent a share or a fraction of a real stock, accompanied by distributed ledgers capable of tracking transfers and ownership.
It should be noted that trading would occur on permissioned blockchains or public networks structured with integrated controls for custody, KYC/AML, and reporting in line with existing regulations.
Trades could take place through authorized ATS/MTF or licensed crypto exchanges, using on-chain settlement and reconciliations towards traditional stock registers. The goal is the reduction of operational costs, an increase in liquidity, and greater transparency on financial flows, with standardized processes throughout the entire supply chain.
Who’s on the move: traditional markets, crypto exchanges, and custodians
Operators like Nasdaq and post-trading infrastructures have begun exploring the tokenization of securities within regulatory sandbox contexts; see Nasdaq’s initiatives in the digital assets field for pilot projects and infrastructures.
Some crypto exchanges had experimented with tokenized stocks products in the past, although these products were later withdrawn for regulatory adjustments (for example, the suspension of “stock tokens” on Binance in 2021).
Currently, the focus shifts to regulated pilot projects and partnerships between broker-dealers, qualified custodians, and issuers. Various sources report that numerous entities have initiated dialogues with the SEC to define the compliance perimeter, with increasing attention to operational aspects.
Risks, Criticisms, and Regulatory Constraints
Some market makers and institutional operators highlight the risk of regulatory arbitrage: overly light on-chain regulations could shift liquidity away from official markets without adequate protections.
In public consultations, entities like Citadel Securities have urged for consistent rules between traditional channels and blockchain, as reported in the SEC comment letters, to avoid distortions.
The SEC’s position remains clear: “We do not regulate based on labels, but on facts and the law.” This implies the application of equal requirements in terms of transparency, audit, and investor protection, regardless of the technological support used. That said, the framework will need to be translated into practical and verifiable rules.
What it means for investors (practically)
- Access: the ability to purchase fractional shares and trade during extended hours could broaden access, even with reduced ticket sizes, promoting greater inclusion.
- Liquidity: the potential increase in liquidity will depend on the presence of market makers and the establishment of clear rules for interoperable markets, as well as the quality of the order books.
- Costs: a potential reduction in fees and settlement times is anticipated thanks to on-chain integration, with fewer operational frictions.
- Custody: an open issue concerns who holds the tokens, between qualified custodians and self-custody solutions, with implications on security and responsibility that need to be assessed. To explore custody solutions, see Kraken launches tokenized stocks: Apple, Tesla, and Nvidia available.
- Legal protection: it is crucial that tokens ensure clear rights related to dividends and voting, avoiding interpretative ambiguities.
What is still missing (unresolved issues)
- SEC Framework: Uncertainty remains and there are no official drafts regarding listing, disclosure, and intermediary responsibilities, which are crucial aspects for operations.
- Reconciliation: there is the challenge of aligning the traditional stock register with the on-chain ledger, avoiding discrepancies between the two worlds.
- Standard: greater interoperability between networks is needed, as well as the definition of standards for digital identity and signatures for corporate actions, with shared processes.
- Taxation: the treatment of dividends, withholding taxes, and capital gains applicable to token-equity is still to be clarified, in accordance with existing regimes.
- Operational risks: the management of smart contracts, custody, and operational incidents represents a critical factor, also from a resilience perspective.
Forecasts and Future Scenarios
The current landscape somewhat resembles the DeFi cycle of 2020–2021, characterized by rapid experimentation followed by consolidation. If regulation proceeds in a coordinated manner, tokenized stocks could expand well beyond the current niche.
Estimates from Binance Research indicate a potential exceeding 1.3 trillion dollars if, hypothetically, only 1% of global equity were tokenized.
The success will depend on three fundamental factors: shared market standards, clarity on on-chain corporate rights, and the commitment of major issuers. Yet, without solid governance, the adoption curve risks slowing down.
Related Insights
- Guide to Asset Tokenization: Benefits and Risks
- MiCA: the new EU rules for crypto markets
- Bitcoin spot ETF USA: impacts on liquidity and market
Editorial suggestion: include an infographic with the timeline of the main pilots, aggregated volumes, and the share of tokenized stocks (~2%).
Conclusion
The potential opening of the SEC to tokenized stocks represents a key step in the convergence between traditional finance and on-chain infrastructures.
The opportunities are evident in terms of efficiency and liquidity, but risks and uncertainties remain: the definition of clear rules, common standards, and effective investor protection are indispensable. That said, the debate is open and the sector is set to evolve rapidly.