The market for tokenized stocks is experiencing a surge in growth, with the combined market capitalization reaching a record $1.2 billion. This milestone, observed in late December 2025, is driven by significant growth throughout September and December. Token Terminal notes that the current state of tokenized stocks mirrors that of stablecoins in 2020, highlighting the early stage of the market.

Tokenized Stocks vs. Traditional Equities

The concept of tokenizing equities involves representing traditional stocks on a blockchain, enabling fractional ownership, increased accessibility, and faster settlement times. While the $1.2 billion market cap is a considerable achievement, it is still minuscule compared to the $145 trillion global equities market. However, even a small penetration into the traditional market could result in hundreds of billions to trillions of dollars in on-chain equity value.

Key Drivers

Several factors are contributing to the growth of tokenized stocks:

• Growing Regulatory Clarity: Maturing blockchain infrastructure and clearer regulatory guidelines are paving the way for compliant and scalable equity issuance and movement on-chain.
• Increased Participation: Growing participation from fintech companies, exchanges, and decentralized finance (DeFi) protocols is fostering innovation and adoption.
• Demand for On-Chain Stock Exposure: Investors are increasingly seeking opportunities to gain exposure to stocks through blockchain technology.
• Real World Asset (RWA) Tokenization: Tokenization of real-world assets has emerged as a major trend in the crypto space, with tokenized stocks being a significant component.

Notable Developments

Several recent developments underscore the momentum behind bringing capital markets on-chain:

• Kraken acquired Backed, an issuer of tokenized stocks.
• Robinhood introduced stock tokens in Europe.
• Galaxy Digital tokenized its Class A common stock.
• Ondo Finance unveiled the 'Ondo GM' tokenization platform, focusing on tokenizing assets like stocks, bonds, and ETFs.

Market Trends

The tokenized stock market offers diverse models, ranging from native issuance and custodial structures to synthetic or derivative-based exposure. The increasing breadth of tokenized stocks, with the number of available assets tripling in 2024, signals progress in adoption and more choices for investors.

Challenges and Opportunities

Despite the promising growth, the tokenized stock market faces challenges, including regulatory uncertainty and the need for greater investor education. However, the potential benefits of tokenization, such as increased liquidity, accessibility, and efficiency, are attracting significant interest from both traditional finance and the crypto space.

The rise of tokenized stocks represents a significant step towards bridging the gap between traditional finance and the world of blockchain. As the market matures and adoption increases, tokenized stocks could play a transformative role in the future of capital markets.