Source: BlockBeats (Adapted from original Chinese article)
The US regulatory landscape has shifted significantly with recent political changes, creating a policy window for securities tokenization. Platforms like Robinhood, Bybit, and Kraken are pioneering the "Tokenized Stocks" movement—reimagining global asset trading through blockchain technology. This fusion of traditional finance and crypto reflects both ambitions to disrupt legacy brokerage models and deep considerations of compliance strategies.
Three Dominant Models for Tokenizing US Stocks
Current market approaches to stock tokenization fall into three categories:
1. Third-Party Issuance with Multi-Platform Access (Backed Finance Model)
Key Features:
- Separation between compliant issuance and trading platform integration
- Licensed entities (e.g., Switzerland/EU-regulated Backed Finance) purchase actual stocks via IBKR Prime
- Stocks held in regulated custodians like Clearstream or Interactive Brokers
- 1:1 token minting on public blockchains (Solana/ERC-20) with trading liquidity provided by crypto exchanges
Advantages:
- Clear asset ownership verified by custodians
- 24/7 trading with DeFi compatibility
- Scalable non-US market expansion
Challenges:
- Limited US accessibility due to SEC unrecognition
- Potential liquidity fragmentation across competing tokenized versions
- Requires trust in issuance transparency (e.g., concerns about Backed Finance's team background)
Historical Context: FTX attempted this model in 2020-2022 before its collapse, offering fractionalized stock tokens via Swiss subsidiary Canco GmbH.
2. Licensed Broker Self-Issuance (Robinhood Model)
Implementation:
- Robinhood's Lithuanian-licensed European subsidiary holds/custodies actual stocks
- Tokens minted on Arbitrum (e.g., TSLA-t) with closed-loop trading in Robinhood's app
- Full chain synchronization ensuring token supply = custody holdings
- Future migration to proprietary Robinhood Chain for cross-chain transfers
Strategic Edge:
- End-to-end control from stock purchase to settlement
- Expansion potential to private equities (OpenAI/SpaceX) and other RWAs
- Recent acquisitions (Bitstamp, WonderFi) strengthen global compliance infrastructure
3. Contract-for-Difference (CFD) Approach (Bybit Model)
Mechanics:
- Derivatives tracking stock prices without underlying asset ownership
- Platforms like Bybit offer leveraged perpetual contracts (e.g., TSLAUSDT)
Pros:
- Rapid deployment without custody requirements
- Supports high-frequency trading strategies
Cons:
- Higher counterparty risk vs. actual tokenized securities
- Regulatory classification as speculative instruments
The Race Between Robinhood and Coinbase
Robinhood's "On-Chain Broker" Playbook
- European Launchpad: Rolled out 200+ tokenized stocks/ETFs via Arbitrum in 31 countries
- Vertical Integration: Combines MiFID licensing, real stock custody, and proprietary chain development
Three-Phase Vision:
- Broker-minted tokens
- Bitstamp liquidity integration
- DeFi interoperability via Robinhood Chain
Coinbase's Infrastructure-First Strategy
- Pursuing SEC no-action letter for blockchain-based stock tokens
- Leveraging Base L2 for native issuance and T+0 settlements
- Potential advantage in institutional adoption via existing exchange network
Key Challenges Ahead
- Fragmented liquidity across competing tokenized versions
- Complex dividend distributions and corporate governance on-chain
- Divergent regional regulations
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FAQ
Q: Are tokenized stocks legally recognized?
A: Currently recognized in select jurisdictions (e.g., EU via MiFID), but US status remains pending SEC clarity.
Q: How do tokenized stocks differ from CFDs?
A: Tokenized stocks represent actual ownership, while CFDs are price-speculation derivatives.
Q: Which model offers the best liquidity?
A: Robinhood's closed-loop system currently leads in real-asset backing, while third-party models may achieve broader access.
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Market Note: Tokenization could bridge traditional equities and DeFi, but regulatory harmonization remains critical for mass adoption.