Token Talks: Launching Tokenized Stocks & U.S. Securities Regulators’ Openness to Discussing Tokenized Securities

Anything can be made into tokens.

Stocks, bonds, real estate, art, collectibles, intellectual property. If it is an asset (tangible or intangible) that has some type of value or ownership, then theoretically, it can be a token.[1]

Companies are racing to launch tokenized stocks and now U.S. securities regulators are open to further discussion regarding tokenized securities.[2]

Tokenized stocks are “digital assets that track the price of real-world equities, such as shares in public companies.”[3]  If the stock price of Netflix goes up, then the value of the token, which mirrors the real stock price, will go up too.

There are two types of tokenized stocks: (1) custodial-backed tokens and (2) synthetic or derivative tokens. A custodial-backed token are digital representations of real-world assets including stocks, bonds, real estate, and even gold.[4] A synthetic or derivative token is a digital asset that does not need direct ownership of the underlying asset and obtains value from an underlying asset or a collection of assets.[5]

On July 9, 2025, Commissioner Hester M. Peirce posted a statement titled, “Enchanting, but Not Magical: A Statement on the Tokenization of Securities.” In this statement, she described how “tokenization may facilitate capital formation and enhance investors’ ability to use their assets as collateral,” but made sure to note that “it does not have the magical abilities to transform the nature of the underlying asset.”[6] The statement then emphasized that market participants should consider meeting with the Commission and their staff as they structure their tokenization product offerings.

Market participants should be aware, according to Commissioner Peirce, of federal securities law when it comes to dealing with tokenized securities. The SEC, since 2018, have emphasized that tokens are to be considered securities, but also remained cautious about these rapid technological developments. Overall, there has been a general hostility towards digital assets.[7] However, that may be changing with tokenized securities, like tokenized stocks.

In a speech on July 31, 2025, Chairman Paul S. Atkins stated, “…many firms seek to ‘tokenize’ their common stock, bonds, partnership interests, and other securities, or tokenize the securities of third parties. Much of this innovation is offshore today due to regulatory challenges in the United States. I also hear from our regulatory policy staff that firms – from household names on Wall Street to unicorn tech companies Silicon Valley – are lined up at our door with requests to tokenize. I have asked the Commission staff to work with firms seeking to distribute tokenized securities within the United States and to provide relief where appropriate to assure that Americans are not left behind.”[8]

No longer wanting to be left behind, a regulated decentralized finance (DeFi) platform, Swarm, partnered with Hedera Foundation to launch ‘DeFi-Compatible’ tokenized stocks.[9] Other trading platforms and crypto exchanges such as Robinwood, Kraken, and Coinbase are actively trying to launch or explore tokenized stock offerings.[10] U.S. Securities regulators being seemingly open to work with firms regarding tokenized securities demonstrates how block-based chain markets and traditional markets could meaningfully converge.

[1] Chainalysis team, Asset Tokenization Explained: Benefits, Risks, and How It Can Work, CHAINALYSIS, August 19, 2025, https://www.chainalysis.com/blog/asset-tokenization-explained/

[2] Crystal Kim, The Race to Launch Tokenized Stocks Is On. Here’s What That Means for U.S. Investors.,  INVESTOPEDIA, August 9. 2025, https://www.investopedia.com/the-race-to-launch-tokenized-stocks-is-on-heres-what-that-means-for-us-investors-11784560#citation-2

[3] Cryptopedia Staff, What Are Tokenized Stocks and How Do They Work?, CRYPTOPEDIA, https://www.gemini.com/cryptopedia/what-are-tokenized-stocks-and-how-do-they-work

[4] Team RWA.oi, Understanding Asset-Backed Tokens and Their Benefits, August 17, 2025, https://www.rwa.io/post/understanding-asset-backed-tokens-and-their-benefits

[5] The Rise of Synthetic Tokens: The Key To Financial Innovation And Asset Management, CALIBRANT, https://www.calibraint.com/blog/synthetic-assets

[6] Commissioner Hester M. Peirce, Enchanting, but Not Magical: A Statement on the Tokenization of Securities, SEC, https://www.sec.gov/newsroom/speeches-statements/peirce-statement-tokenized-securities-070925

[7] Grace H. Lin & Tris R. Sebesta, Change is Calling: A Contemporary Commission to Confront Cryptic Crypto Conditions, SEC, https://www.sec.gov/files/ctf-input-lin-sebesta-041125.pdf.

[8] Paul S. Atkins, American Leadership in the Digital Finance Revolution, SEC, https://www.sec.gov/newsroom/speeches-statements/atkins-digital-finance-revolution-073125

[9] Jona Jaupi, Swarm Launches ‘DeFi-Compatible’ Tokenized Stocks on Hedera, The Defiant, https://thedefiant.io/news/defi/swarm-launches-defi-compatible-tokenized-stocks-on-hedera

[10] Crystal Kim, The Race to Launch Tokenized Stocks Is On. Here’s What That Means for U.S. Investors, Investopedia, https://www.investopedia.com/the-race-to-launch-tokenized-stocks-is-on-heres-what-that-means-for-us-investors-11784560