Tokenized Stocks Reach All-Time High $1.2 B While ESMA Flags “Risk of Misunderstanding”
Demand for tokenized equities has accelerated since their mainstream debut earlier this year. The trend points to a new asset class gaining traction beyond Bitcoin and stablecoins. Data from Token Terminal shows the combined market capitalization of tokenized stocks has reached a record $1.2 billion, with growth strongest in September and December.Amid this growth, Regulators have flagged risks tied to the expanding market. The European Securities and Markets Authority warned that tokenized stocks may create investor confusion, as they often track share prices without granting shareholder rights. ESMA executive director Natasha Cazenave said there is a “risk of misunderstanding” around ownership. The watchdog added most tokenized equity projects remain small and illiquid, despite interest in 24/7 trading and fractional ownership.Tokenized Stocks Mirror 2020 Stablecoins Growth“Tokenized stocks today are like stablecoins in 2020,” Token Terminal said. The comparison reflects how early the market remains. Stablecoins were still limited in scale in 2020. They have since grown into a sector valued at about $300 billion, Cointelegraph reported.Industry participants have also compared tokenized equities to the early decentralized finance boom of 2020. They cite faster settlement, continuous trading, and fractional ownership as key features. These characteristics are seen as factors that could support the movement of more global equities onchain.🔥 BIG: Tokenized stocks market cap hits all-time high of $1.2 billion, per Token Terminal. Securitize Plans Compliant Onchain Equity TradingMarket activity spiked in September following Backed Finance’s launch of its xStocks suite on Ethereum, which introduced around 60 tokenized equities through partnerships with Kraken and Bybit. Momentum continued into December, with Securitize announcing plans for compliant onchain trading that would enable direct share ownership.Ondo, Coinbase Expand Tokenized Stock OfferingsOther firms are preparing similar offerings. Ondo Finance plans to roll out tokenized US stocks and exchange-traded funds on Solana in early 2026.Coinbase is moving in the same direction. This month, it announced plans to offer stock trading as part of its effort to become an “everything exchange.”Institutional interest has also emerged. Nasdaq disclosed that it has filed with the US Securities and Exchange Commission to offer tokenized stocks on its platform. The exchange said tokenization is a top strategic priority.