This month, the news on tokenized stocks has been especially dense: the SEC granted a 5-year conditional exemption for trading tokenized stocks; Backpack said it wants to move 10,000 US-listed stocks onto $SOL; Aave V4 on Base accepted Coinbase’s tokenized stocks as collateral to borrow USDC; and Kraken’s parent company also plans to launch in Q2 next year.
But even if they’re all called “stock tokens,” the underlying assets might be completely different. Roughly, there are three categories.
1. Document-based
The issuer buys the shares off-chain into custody, then issues a token on-chain that tracks the price. What you hold is a document or claim on the issuer—not shareholder equity. The upside is that it can be bought globally and transferred 24/7; the risk is borne by the issuer and the custodian.
2. Broker-integration type
Real stocks in token and broker accounts can be converted bidirectionally. What Backpack wants to do is exactly this: one API that moves stocks back and forth between a broker account and DeFi. There are differences in the details—for example, dividends are not paid out as cash; they’re automatically reinvested into tokens. For stock splits, the token balances are adjusted directly.
3. The issuer puts it on-chain directly
The company registers the shares on the chain itself; the token is the share itself. Cleanest approach, but it requires the company’s cooperation, and the number of companies is limited.
The core requirement of the SEC exemption this time is that the tokens must confer the same rights as the original stock. The closer you get to the third category, the easier it is to pass this threshold.
Before buying, ask yourself three questions:
1. What I’m getting—are they shareholder rights, or just a certificate/receipt against the issuer?
2. How are dividends, voting, and stock splits handled?
3. Can I convert back to real stock, and where/how?
Tokenized stocks will become more and more common, but it’s not just a disguise for a US stock account. First understand the structure, then look at the price.
Watch which upcoming products will launch according to the SEC exemption standards.