Author | Cubone Wu said Blockchain
This article is organized with the participation of GPT, intended for information sharing only and does not constitute any investment advice. Readers are advised to strictly comply with local laws and regulations and not to engage in illegal financial activities.
After Trump took office, US cryptocurrency regulation was comprehensively relaxed, and the tokenization of US stocks became a super hot topic, with almost all major exchanges participating, 'using US Treasury-backed stablecoins to trade US stocks, making America great again, how Trump would love this idea!'
On June 30, 2025, Bybit and Kraken respectively launched the xStocks product provided by the Swiss compliant asset tokenization platform Backed Finance. The relevant tokens are 1:1 backed by real stocks, held by regulated custodians, and deployed on the Solana chain, achieving 24/7 uninterrupted trading and on-chain settlement. Due to compliance restrictions, this service is currently only available to non-US users.
On the same day, Robinhood announced the launch of stock token trading services based on the Arbitrum network in Europe, planning to gradually expand to 24/7 trading and tokenize equity in some unlisted companies, including OpenAI and SpaceX. This service is currently not available to US users.
Classification and comparison of US stock trading solutions on mainstream crypto trading platforms
1. Third-party issuance + Multiple exchange access model (representative platforms: Bybit, Kraken, Gemini)
Tokens issued by regulated issuers (such as Backed Finance) that are pegged 1:1 to real stocks and deployed on public chains (such as Solana). Crypto exchanges serve as access platforms providing matching services, supporting on-chain transfers and DeFi applications, allowing users to trade 24/7 and enjoy corresponding economic rights (such as dividends). The compliance responsibilities of this model are primarily borne by the issuers, while exchanges themselves often do not hold securities licenses, and their service scope usually excludes US users.
2. Licensed brokerage self-built chain + self-operated issuance model (representative platform: Robinhood)
Direct issuance of stock tokens by licensed brokerages and custodians of underlying assets, achieving full-process integration of issuance, clearing, and settlement on-chain. Robinhood currently provides this service based on Arbitrum and plans to launch its own Layer 2 blockchain, Robinhood Chain, allowing users self-custody and 24/7 trading. Token holders can obtain economic rights to actual stocks (such as dividends). This model has high compliance, suitable for strictly regulated markets, but has high technical and compliance thresholds, with limited landing platforms.
3. Contract for Difference (CFD) model (representative platform: Bybit)
Through systems like MT5, users can trade CFDs on US stock prices using USDT as margin for leveraged long and short positions without holding actual stocks. This trading model is convenient and suitable for short-term speculation, but users do not enjoy any shareholder rights or dividends. CFDs are financial derivatives regulated strictly in the US and Europe, with most platforms only open to specific offshore market users without a license, and European users may face restrictions.
Additionally, Coinbase is seeking approval from the U.S. SEC, planning to launch tokenized stock trading services under a compliant framework. The plan intends to issue digital tokens representing stock ownership via blockchain, supporting on-chain settlement and matching. Currently, Coinbase has submitted a pilot application to the SEC, and if it obtains a No-Action Letter or exemption license, it will become one of the first compliant platforms to implement tokenized US stock services in the United States.
Review of the previous cycle of tokenized US stock experiments: Attempts and failures of FTX, Binance, and decentralized protocols
FTX (in collaboration with CM-Equity): Crypto derivatives giant FTX was one of the early explorers of tokenized US stocks. In October 2020, FTX partnered with German licensed financial institution CM-Equity AG and Swiss digital asset company Digital Assets AG to launch US stock token trading services. FTX allowed non-US users to trade tokens of a series of US-listed company stocks, including popular stocks like Facebook, Netflix, Tesla, and Amazon. These tokens are backed by the actual stocks held by partners, supporting fragmented trading, allowing users to purchase partial stock tokens for as little as a few dollars, significantly lowering the investment threshold. FTX made impressive progress at one point: in the fourth quarter of 2021, its tokenized stock trading volume peaked, with a monthly transaction volume of approximately $940 million in October. However, due to the unfriendly regulatory environment at the time (with regulatory agencies cautious about this innovative product), FTX's US stock token business was never recognized by mainstream regulators. In 2022, FTX faced a crisis due to its own risks and fund misappropriation issues and declared bankruptcy in November, abruptly halting its tokenized stock services. FTX's attempt exposed compliance trust issues: once the issuing platform encounters a credit crisis, the tokenized assets held by investors may become impossible to redeem. Moreover, due to the lack of clear regulatory guidance, FTX's related businesses faced scrutiny and restrictions in multiple locations (for instance, Germany's BaFin warned FTX that such products might be non-compliant). The FTX case demonstrates that without a solid compliance framework, unilateral promotion of securities tokenization by exchanges is difficult to sustain.
Binance (Stock Tokens): The world's largest crypto exchange Binance followed suit and launched US stock token trading services in April 2021, with Tesla (TSLA) being the first stock listed. Binance also collaborated with CM-Equity and Digital Assets AG to issue tokens, allowing users to purchase micro amounts of US stock with crypto assets. At that time, Binance's move aimed to compete with FTX, Bittrex Global, and others, providing stock trading channels for its large user base. However, this business only lasted about three months. Due to rapid responses from regulatory agencies around the world (for example, the UK's Financial Conduct Authority FCA and Germany's BaFin questioned its compliance), Binance was forced to voluntarily delist all stock tokens in July 2021 and sought a more compliant product direction. Reports indicated that Binance did not obtain the necessary licenses to issue securities tokens at that time, facing significant legal risks and had to hastily terminate the service. Binance's experience highlights the substantial impact of regulatory pressure on centralized platforms attempting securities tokenization: top crypto companies, if they do not resolve compliance issues in advance, will swiftly encounter regulatory resistance upon hastily launching such products, hindering their ability to operate sustainably.
Mirror Protocol by Terra (Synthetic Assets): Unlike the centralized exchange path, the Terra blockchain ecosystem launched the Mirror Protocol at the end of 2020, taking a fully decentralized synthetic asset approach. Mirror allows users to mint synthetic tokens pegged to US stock prices (called mAssets, e.g., mTSLA, mAAPL), using algorithms and oracles to track real stock prices. Users must stake excess collateral (such as UST stablecoin) on Terra to generate mAssets and trade through AMM pools. Mirror was once popular, providing a KYC-free on-chain channel for groups unable to invest directly in US stocks. However, its fate is closely tied to the Terra stablecoin ecosystem: in May 2022, the UST stablecoin on the Terra chain collapsed, directly causing the collateral value of the Mirror protocol to drop to zero, and a large number of mAssets quickly lost their peg, leading to liquidity depletion. Worse yet, regulators are also closely monitoring the protocol — the US SEC sent a subpoena to Mirror in 2021 and further accused it of involving unregistered securities issuance when suing Terraform Labs in 2023. Ultimately, the Mirror Protocol came to an end due to dual failures in technology and compliance: on one hand, the algorithmic stability mechanism was fragile and could not withstand extreme market shocks; on the other hand, its model of circumventing regulation ultimately could not be accepted by the mainstream financial system. The rise and fall of Mirror reflect that previous attempts at decentralized synthetic securities faced significant obstacles, providing lessons for this round's projects to pivot towards tokenized solutions backed by real assets and compliant with regulatory requirements.
Synthetix (On-chain synthetic assets): Synthetix is a seasoned decentralized derivatives protocol on Ethereum that launched synthetic US stock assets (Synth) in 2020, such as sTSLA (Tesla synthetic asset), sAAPL, etc. Its model involves minting synthetic tokens pegged to stock prices through over-collateralized crypto assets, allowing investors to gain price exposure on-chain without holding actual stocks. This synthetic asset model does not require custodial entities and has no geographical restrictions, with trading fully conducted on decentralized exchanges, theoretically achieving permissionless global trading. However, the actual results were less than ideal: for example, since its launch, the total on-chain transactions (including minting and redemption) of sTSLA have only reached 798, with trading volumes remaining sluggish. Due to insufficient user demand, most market makers are unwilling to bear the short-selling risks and funding costs required for minting synthetic assets, leading to gradual liquidity depletion. Coupled with regulatory concerns (that such synthetic stocks bypass securities regulation), Synthetix gradually delisted US stock-related Synths after 2021, shifting focus to other derivatives like forex, marking the failure of the synthetic US stock path. This experience shows that purely decentralized stock token models without real asset backing are unsustainable, unable to find a viable business model and product-market fit (PMF), and struggle to compete with more compliant and transparent models.
Discussion on future trends: Can compliance implementation be achieved?
Whether this round of tokenized securities fever can continue to develop and truly achieve compliance implementation depends on the positive interaction between technological innovation and the regulatory environment. From the regulatory perspective, changes in the political winds in the US have brought significant turns for the field. After the Trump administration took office, it released more open signals for crypto regulation: the new SEC chairman and commissioners hold a more friendly attitude, the SEC has withdrawn lawsuits against several crypto companies like Coinbase, Binance, and Kraken, and has established a dedicated digital asset working group to formulate new regulations. For example, the SEC's enforcement department recently changed its stance, clearly stating that certain forms of staking do not constitute securities issuance. At the congressional level, stablecoin legislation has also made breakthrough progress, with the US federal government expected to introduce stablecoin legislation to provide legal anchoring for on-chain dollars, which will serve as infrastructure for the development of real-world assets (RWA). Real-world assets (RWA) are receiving unprecedented positive evaluations: US political and regulatory leaders are beginning to acknowledge that introducing traditional assets like government bonds and stocks onto the blockchain through compliance measures can help improve market efficiency and consolidate the dollar's financial position. These positive policy tones have cleared some obstacles for the landing of tokenized securities in core financial markets.
At the same time, regulatory frameworks in regions like Europe and Asia are becoming clearer, with regulations like MiCA providing basic guidance for security tokens, gradually narrowing the space for regional regulatory arbitrage. Leading jurisdictions like Switzerland and Singapore have issued relevant licenses (such as the platform license for Backed under Switzerland's DLT Act, Singapore's MAS RMO license, etc.), setting benchmarks for compliant operations. This means that new participants in this round are more inclined to operate within the regulatory sandbox and licensing scope to avoid repeating the mistakes of gray operations from the previous cycle.
In terms of technology and market aspects, the current round of tokenized securities projects has improved in product design and market fit compared to the previous cycle. On one hand, platforms pay great attention to asset authenticity and transparency — tokens are 100% backed by physical assets, with custodial and audit information disclosed regularly, enhancing investor confidence through blockchain verifiability. For example, Backed and Swarm release reserve reports monthly, and Chainlink oracles monitor token/asset relationships in real-time, striving to avoid 'shadow assets' or decoupling risks. On the other hand, new solutions place greater emphasis on user experience: platforms like Robinhood introduce mature mobile platforms for convenient interfaces; Bybit integrates stock tokens into existing trading applications for one-stop management of crypto and traditional assets. At the same time, features like 24/7 trading, T+0 settlement, and fractional trading are genuinely realized, allowing users to enjoy more flexible and efficient trading services than traditional brokerages. These improvements are expected to address the issue of previous cycles' products failing to find product-market fit (PMF): the purely synthetic asset model lacked appeal to crypto investors, while now token stocks with real value support, combined with DeFi functionalities (such as staking, lending, liquidity mining), may form new demand growth points.
Nevertheless, for tokenized securities to become mainstream, they still face many challenges. The last mile of compliance implementation needs to be cleared. In the US, although the regulatory atmosphere is warming, legal clarity is still needed to truly allow retail investors to trade on-chain stocks. Companies like Coinbase are actively seeking SEC No-Action permissions, but whether regulators can quickly give the 'green light' remains uncertain. If the US market cannot open up soon, large-scale global securities chain reform will still be constrained. However, the industry expects that if leading companies like Coinbase achieve breakthroughs, it will set a benchmark for the entire sector. Odaily research indicates that most compliant platforms, due to strict KYC restrictions, offer user experiences close to or even more cumbersome than traditional brokerages, making it difficult to attract pure crypto users, while unlicensed platforms leave users with concerns. Additionally, for crypto traders pursuing high volatility, the price fluctuations of US stocks are relatively limited and cannot directly replicate the speculative heat of the crypto market. Therefore, how to balance compliance with convenience and find differentiated application scenarios will determine whether tokenized US stocks can experience explosive growth. Some industry insiders suggest exploring ways to create a new type of on-chain native securities investment experience through equity splitting, decentralized autonomous organization (DAO) holding, securities + gamification, etc., to stimulate interest in the crypto community.
Secondly, one of the challenges of tokenizing US stocks lies in the lack of liquidity in the secondary market. This is because it differs from stocks listed on traditional exchanges; instead, it is a 'representative rights certificate' issued on-chain by the custodian or platform itself, and these tokens usually can only be traded on specific platforms (like xStocks, Bybit, Kraken) and lack a direct arbitrage path with traditional financial markets.
The involvement of market makers is crucial for solving liquidity issues, but there are several challenges: 1. Assets cannot hedge freely: If a market maker markets xAAPL (Apple token) on-chain but cannot hedge risks simultaneously in the US stock market (due to restrictions / costs / regulations), their risk exposure cannot be effectively controlled. 2. Lack of on-chain compliant settlement systems: True tokens representing securities ownership must handle dividends, voting rights, clearing, and other issues, and these functions are difficult to standardize on-chain, making it hard for market makers to assess their real value. 3. High platform credit risk: Market makers face high platform credit risks and are less willing to participate unless there are extremely high return compensations.
To address these challenges, some platforms may collaborate with custodians to provide strong credit backing; introduce stablecoin trading pairs and on-chain reward programs to attract market makers to provide initial liquidity; and connect on-chain AMM or order books with off-chain liquidity pools. However, overall, unless these tokenized stocks gain a closer bridging mechanism with real securities markets, liquidity issues will remain structurally difficult to resolve.
Moreover, if these tokenized US stock services open purchase channels to Chinese users, there are significant legal and regulatory risks from both the platform's and Chinese investors' perspectives. China strictly prohibits unlicensed offshore securities services or intermediary activities. Even if the platform is registered overseas, providing US stock trading-related services to Chinese users (especially involving dividends, voting rights, and financial leverage) may be regarded as 'illegal securities business.' Individuals in China cannot freely invest in offshore securities (they must go through channels like QDII). Indirect investment through crypto may be classified as illegal currency exchange or regulatory circumvention.
In summary, the new wave of tokenized securities is backed by a more friendly policy environment and more mature technical solutions, providing a firmer foundation than the previous cycle. If regulatory openness and industry self-discipline progress simultaneously — with both loose policies and legal guarantees promoted by the Trump administration, as well as a high emphasis on compliance and risk control within the industry — then tokenized US stock products are expected to gradually move towards sustainable development, becoming an organic bridge connecting traditional financial markets and the Web3 world. Of course, this process will be gradual: only when the market truly identifies user demand pain points and provides unique value (for example, achieving 7x24 global market interaction, new liquidity mining opportunities, etc.), can tokenized securities shed the 'concept gimmick' label and usher in large-scale compliance and widespread application.