Author:Cubone Wu Talks about Blockchain
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After Trump took office, the regulation of cryptocurrencies in the United States was fully relaxed, and the tokenization of U.S. stocks has become a hot topic. Almost all major exchanges have participated in it. "Using U.S. debt-collateralized U.S. dollar stablecoins to speculate on U.S. stocks and make America great again, how much Trump would like this idea!"
On June 30, 2025, Bybit and Kraken respectively launched the xStocks product provided by Backed Finance, a Swiss compliant asset tokenization platform. The relevant tokens are supported by real stocks 1:1, held by regulated custodians, and deployed on the Solana chain, enabling 7×24 hours of uninterrupted trading and on-chain settlement. Due to compliance restrictions, this service is currently only open to non-U.S. users.
On the same day, Robinhood announced the launch of a stock token trading service based on the Arbitrum network in Europe, with plans to gradually expand to 7×24 hours trading and tokenize some private company equity, including OpenAI and SpaceX. The service is currently not open to US users.
Classification and comparison of US stock trading solutions on mainstream crypto trading platforms
1. Third-party issuance + multi-exchange access model (representative platforms: Bybit, Kraken, Gemini)
Tokens that are 1:1 anchored to real stocks are issued by regulated issuers (such as Backed Finance) and deployed on public chains (such as Solana). Crypto exchanges provide matching services as access platforms, support on-chain transfers and DeFi applications, and users can trade 24/7 and enjoy corresponding economic rights (such as dividends). The compliance responsibility of this model is mainly borne by the issuer. Most exchanges themselves do not hold securities licenses, and their service scope usually excludes US users.
2.Licensed brokerage firms build their own chains + self-operated issuance model (representative platform: Robinhood)
Licensed brokerage firms directly issue stock tokens and custody the underlying assets, realizing the on-chain integration of the entire process of issuance, clearing and settlement. Robinhood currently provides this service based on Arbitrum, and plans to launch its own Layer 2 blockchain Robinhood Chain, which supports user self-custody and 7×24 hours trading. Token holders can obtain the economic rights of actual stocks (such as dividends). This model is highly compliant and suitable for markets with strict supervision, but the technical and compliance thresholds are high, and the landing platform is still limited.
3. CFD model (representative platform: Bybit)
Provide CFD trading of US stock prices through systems such as MT5. Users can use USDT margin for long and short leverage operations without holding real stocks. This model is convenient for trading and suitable for short-term speculation, but users do not enjoy any shareholder rights or dividends. CFD is a financial derivative and is strictly regulated in the European and American markets. Most platforms are only open to specific offshore market users without a license, and European users may be restricted.
In addition, Coinbase is seeking approval from the U.S. SEC and plans to launch tokenized stock trading services under a compliance framework. The plan intends to issue digital tokens representing stock ownership through blockchain, supporting on-chain settlement and matching. Currently, Coinbase has submitted a pilot application to the SEC. If it obtains a No-Action Letter or an exemption license, it will become one of the first compliant platforms to implement tokenized U.S. stock services in the United States.
Review of the tokenized U.S. stock experiments in the last cycle: FTX, Binance and the attempts and failures of decentralized protocols
FTX (in cooperation with CM-Equity): Crypto derivatives giant FTX is one of the early explorers of tokenized U.S. stocks. In October 2020, FTX teamed up with German licensed financial institution CM-Equity AG and Swiss digital asset company Digital Assets AG to launch U.S. stock token trading services. FTX allows non-US users to trade tokens of a range of US listed company stocks, including popular stocks such as Facebook, Netflix, Tesla, and Amazon. These tokens are backed by the actual shares held by the partners and support fragmented trading. Users can buy some stock tokens for as little as a few dollars, greatly reducing the investment threshold. FTX once made good progress in this move: in the fourth quarter of 2021, its tokenized stock trading volume reached a peak, with a monthly turnover of approximately US$940 million (October). However, due to the unfriendly regulatory environment at the time (regulators in various countries were cautious about this innovative product), FTX's US stock token business has never been recognized by mainstream regulators. In 2022, FTX broke out a crisis due to its own risks and misappropriation of funds and went bankrupt and liquidated in November, and its tokenized stock service also came to an abrupt end. FTX's attempt exposed the problem of compliance trust: once the issuing platform has a credit crisis, the tokenized assets held by investors may not be redeemed. In addition, due to the lack of clear regulatory guidance, FTX's related businesses have been questioned and restricted in many places (for example, Germany's BaFin has warned FTX that such products may violate regulations). The FTX case shows that without the support of a solid compliance framework, it is difficult for exchanges to unilaterally promote the tokenization of securities.
Binance (Stock Tokens): Binance, the world's largest crypto exchange, followed closely and launched a US stock token trading service in April 2021, with Tesla (TSLA) as the first listed stock. Binance also cooperated with CM-Equity and Digital Assets AG to issue tokens, supporting users to purchase micro-amounts of US stocks with crypto assets. At the time, Binance's move was intended to compete with FTX, Bittrex Global and others to provide stock trading channels for its huge users. However, the business only lasted about three months. Due to the rapid statements of regulators in various countries (for example, the UK Financial Conduct Authority FCA and Germany's BaFin questioned its compliance), Binance was forced to take the initiative to remove all stock tokens in July 2021 and seek a more compliant product direction. According to reports, Binance did not obtain the required license to issue security tokens at the time, so it faced great legal risks and had to hastily terminate the service. Binance's experience highlights the huge impact of regulatory pressure on centralized platforms attempting to tokenize securities: if top crypto companies launch such products without addressing compliance issues in advance, they will quickly encounter regulatory blockades and cannot continue to operate. Terra's Mirror Protocol (synthetic assets): Unlike the path of centralized exchanges, the Terra blockchain ecosystem launched the Mirror Protocol at the end of 2020, taking the path of fully decentralized synthetic assets. Mirror allows users to mint synthetic tokens (called mAssets, such as mTSLA, mAAPL) anchored to US stock prices, and use algorithms and oracles to track real stock prices. Users need to pledge excess collateral (such as UST stablecoins) on Terra to generate mAssets and trade them through AMM trading pools. Mirror was once popular, providing a KYC-free on-chain channel for groups around the world who cannot invest directly in U.S. stocks. However, its fate is closely linked to the Terra stablecoin ecosystem: the collapse of the Terra chain's UST stablecoin in May 2022 directly caused the collateral value of the Mirror protocol to return to zero, a large number of mAssets quickly lost their anchors, and liquidity dried up. To make matters worse, regulators are also keeping a close eye on the protocol — the U.S. SEC sent a subpoena to Mirror in 2021, and in 2023, it accused Mirror of unregistered securities issuance when suing Terraform Labs. In the end, Mirror Protocol came to an end due to the dual failure of technology and compliance: on the one hand, the algorithmic stabilization mechanism was fragile and could not withstand extreme market shocks; on the other hand, its model of circumventing regulation was ultimately difficult to be accepted by the mainstream financial system. The rise and fall of Mirror reflects that the attempts at decentralized synthetic securities in the previous cycle basically hit a wall, providing lessons for this round of projects to turn to tokenization solutions that are backed by real assets and meet regulatory requirements.
Synthetix (on-chain synthetic assets): Synthetix is a senior decentralized derivatives protocol on Ethereum. It launched synthetic U.S. stock assets (Synth) in 2020, such as sTSLA (Tesla synthetic assets) and sAAPL. Its model is to mint synthetic tokens anchored to stock prices through over-collateralized crypto assets, and investors can obtain price exposure on the chain without holding real stocks. This synthetic asset model does not require a custodial entity or geographical restrictions. Transactions are conducted entirely on decentralized exchanges, theoretically realizing unlicensed global transactions. However, the actual effect is not ideal: taking sTSLA as an example, the total on-chain transactions (including minting and redemption) since its launch are only 798, and the trading volume has been sluggish for a long time. Due to the lack of sufficient user demand, most market makers are unwilling to bear the short-selling risks and capital costs required to mint synthetic assets, and liquidity is gradually drying up. Coupled with concerns at the regulatory level (this type of synthetic stock bypasses securities regulation), Synthetix has gradually removed US stock-type Synths after 2021 and turned to other derivatives such as foreign exchange, and the path of synthetic US stocks has failed. This experience shows that the purely decentralized stock token model without real asset support is difficult to sustain, and it is difficult to find a viable business model and product fit (PMF), and it is difficult to compete with more compliant and transparent models.
Future trend discussion, can it be implemented in compliance?
Whether this round of tokenized securities craze can continue to develop and truly land in compliance depends on the benign interaction between technological innovation and the regulatory environment. From a regulatory perspective, the change in the political direction of the United States has brought a major turning point to this field. After the Trump administration came to power, it released a more open signal of crypto regulation: the new SEC chairman and commissioners have a more friendly attitude. The SEC has withdrawn lawsuits against Coinbase, Binance, Kraken and other crypto companies, and set up a special digital asset working group to formulate new regulations. For example, the SEC enforcement department has recently changed its attitude and made it clear that certain forms of pledges do not constitute securities issuance. At the congressional level, stablecoin legislation has also made breakthrough progress. The US federal government is expected to introduce a stablecoin bill to provide a legal anchor for the dollar on the chain, which will become the infrastructure for the development of RWA. Real-world assets (RWA) are receiving unprecedented positive reviews: US politicians and senior regulators have begun to recognize that introducing traditional assets such as treasury bonds and stocks into the blockchain through compliance means will help improve market efficiency and consolidate the financial status of the US dollar. These positive policy tones have cleared some obstacles for the implementation of tokenized securities in core financial markets.
At the same time, the regulatory frameworks in Europe and Asia are becoming clearer, and regulations such as MiCA provide basic guidance for security tokens, and the space for regional regulatory arbitrage is gradually shrinking. Pioneering jurisdictions such as Switzerland and Singapore have issued relevant licenses (such as Backed's platform license under the Swiss DLT Act and Singapore MAS's RMO license, etc.), setting a benchmark for compliant operations. This means that the new round of participants are more inclined to conduct business within the scope of regulatory sandboxes and licenses to avoid repeating the mistakes of the previous cycle where gray operations were hit.
In terms of technology and market, this round of tokenized securities projects has also improved in product design and market fit compared with the previous cycle. On the one hand, each platform attaches great importance to asset authenticity and transparency. Tokens are 100% backed by physical assets, custody and audit information are disclosed regularly, and the verifiability of blockchain is used to enhance investor confidence. For example, Backed, Swarm, etc. publish reserve reports every month, and Chainlink oracles monitor the token/asset correspondence in real time, trying to avoid the risk of "shadow assets" or de-anchoring. On the other hand, new solutions pay more attention to user experience: Robinhood and others introduce mature mobile platforms to provide a convenient interface; Bybit and others integrate stock tokens into existing trading applications to achieve one-stop management of crypto assets and traditional assets. At the same time, features such as 24/7 trading, T+0 settlement, and fractional stock trading are truly implemented, allowing users to enjoy more flexible and efficient trading services than traditional brokerages. These improvements are expected to solve the problem of previous cycle products failing to find product market matching (PMF): in the past, the pure synthetic asset model lacked appeal to crypto investors, and now token stocks with real value support are superimposed with DeFi functions (such as pledged lending and liquidity mining), which may form a new demand growth point.
Despite this, tokenized securities still face many challenges to go mainstream. The last mile of compliance implementation still needs to be opened up. In the United States, although the regulatory atmosphere has warmed up, it still needs legal clarification to truly allow retail investors to trade on-chain stocks. Coinbase and others are actively seeking SEC No-Action licenses, but it is still uncertain whether regulators can give a "green light" soon. If the US market is delayed in opening up, large-scale global securities chain reforms will still be constrained. However, the industry expects that if leading companies such as Coinbase make breakthroughs, they will set a benchmark for the entire industry. Odaily's research pointed out that most compliant platforms have strict KYC restrictions, and the user experience is close to that of traditional brokerages or even more cumbersome, making it difficult to attract pure crypto users, while unlicensed platforms make users worried. In addition, for crypto traders who pursue high volatility, the rise and fall of US stocks are relatively limited, and they cannot directly replicate the speculative enthusiasm of the crypto market. Therefore, how to strike a balance between compliance and convenience and find differentiated application scenarios will determine whether tokenized U.S. stocks can grow explosively. Some industry insiders suggest that in the future, we can explore ways to create a new type of securities investment experience native to the chain through equity splitting, decentralized autonomous organization (DAO) holdings, securities + gamification, etc., to stimulate the interest of the crypto community.
Secondly, one of the difficulties of tokenizing U.S. stocks is the lack of liquidity in the secondary market. Because it is different from stocks listed on traditional exchanges, but a "representative rights certificate" issued on the chain by the custodian or the platform itself, these tokens can usually only be traded on specific platforms (such as xStocks, Bybit, Kraken), and lack direct arbitrage paths with traditional financial markets.
The participation of market makers is crucial to solving liquidity problems, but there are several difficulties: 1. Assets cannot be freely arbitraged and hedged: If market makers make markets in xAAPL (Apple tokens) on the chain, but cannot hedge risks simultaneously in the U.S. stock market (due to restrictions/costs/regulations), their risk exposure cannot be effectively controlled. 2. Lack of a compliant settlement system on the chain: True tokens representing securities ownership must deal with issues such as dividends, voting rights, and liquidation, and these functions are difficult to standardize on the chain, and it is difficult for market makers to assess their true value. 3. High platform credit risk: Market makers face high platform credit risks and are less willing to participate unless they are compensated with extremely high yields.
To address these challenges, some platforms may cooperate with custodians to provide strong credit endorsements; introduce stablecoin trading pairs and on-chain reward plans to attract market makers to provide initial liquidity; and link with off-chain liquidity pools through on-chain AMM or order book. But overall, unless these tokenized stocks obtain a closer bridging mechanism with the real securities market, the liquidity problem will remain structurally difficult to solve.
In addition, if these tokenized US stock services open purchase channels to Chinese users, there will be significant legal and regulatory risks from both the platform and Chinese investors. China strictly prohibits unauthorized overseas securities services or intermediary activities. Even if the platform is registered overseas, if it provides US stock trading-related services to Chinese users (especially those involving dividends, voting rights, and financial leverage), it may be regarded as "illegal securities business." Chinese individuals are not allowed to freely invest in overseas securities (they must go through channels such as QDII). Indirect investment using encryption may be characterized as illegal currency exchange or circumvention of regulation.
To summarize, the new wave of tokenized securities is backed by a more friendly policy environment and more mature technical solutions, and has a more solid foundation than the previous cycle. If regulatory openness and industry self-discipline go hand in hand — — with both the loose policies and legal guarantees promoted by the Trump administration and the industry's high attention to compliance and risk control — — then tokenized U.S. stock products are expected to gradually move towards sustainable development and become an organic bridge connecting traditional financial markets with the Web3 world. Of course, this process will be gradual: only when the market truly finds the pain points of user needs and provides unique value (such as achieving 7×24 linkage in the global market, new liquidity mining opportunities, etc.), can tokenized securities get rid of the label of "concept gimmick" and usher in large-scale compliance implementation and popular application.
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