From Robinhood to Kraken, traditional and crypto-native platforms are racing to tokenize equities. But beneath the hype lies a harder truth: tokenized stocks won’t democratize finance unless the rails — and rights — are truly open.
The premise: Stocks are going on-chain
According to Cointelegraph Magazine, the tokenization of stocks is accelerating. Several major players — including Robinhood, Kraken, Backed, and Swarm — are now offering or experimenting with tokenized equity products:
- Robinhood supports 24/7 equity trading, mimicking crypto markets
- Kraken has previously explored tokenized ETFs and crypto-native wrappers
- Backed and Swarm offer real-world asset (RWA) tokens backed by stocks or ETFs, tradable on-chain under EU frameworks
The thesis?
By wrapping traditional financial instruments in crypto-native tokens, users can gain:
- Global, 24/7 access to equity markets
- Fractional ownership of expensive assets
- Faster settlement, fewer intermediaries
- On-chain programmability (e.g. collateral, automation, lending)
It sounds revolutionary. But is it?
The catch: Compliance, control, and custodianship
Despite the narrative of democratization, most tokenized stock products today are not bearer assets. Users do not actually “own” the shares in the traditional legal sense. Instead, they hold:
- Derivative tokens
- Debt instruments
- Wrapped claims on real-world securities held by third-party custodians
In other words:
Tokenized stocks are only as decentralized as their underlying legal architecture.
If the issuer can freeze, revoke, or suspend your token — it’s not your equity.
Furthermore, most tokenized stock platforms require jurisdictional filters, KYC, and limit access based on securities laws. Few — if any — operate with true global permissionless access.
Opinion: Tokenized stocks are a powerful tool — but not yet a liberation
At RatEx42, we see tokenized RWAs as a foundational part of the next financial stack. But we remain skeptical of narratives that oversell them as a silver bullet for inclusion or decentralization.
Here’s our position:
- Programmability is not ownership. Unless users have legal claims on dividends, votes, and recourse, tokenization may just wrap old power in new code.
- Tokenization without exit is risk. If users can’t redeem tokens or cash out globally, the product becomes geographically captive — especially in unstable jurisdictions.
- We need trustless infra, not just shiny wrappers. Real innovation will come when RWAs settle peer-to-peer, with on-chain compliance layers, not just custodial wrappers pretending to be open finance.
Until then, tokenized stocks will remain useful but centralized tools — potentially transformative, but not yet disruptive in the original spirit of crypto.
Strategic implications for RatEx42
1. RWA tokens will be tiered
We will classify tokenized stocks as:
- Custodial and non-transferable (e.g. Robinhood-style access)
- Tokenized claims with redemption rights (e.g. Swarm, Backed)
- Fully programmable, bearer-capable RWAs (currently rare)
This helps users and partners make informed risk/reward decisions.
2. Compliance-first tokenization is winning—for now
The platforms gaining traction (Swarm, Backed, etc.) are those that embrace regulation without compromising UX.
RatEx42 is working to onboard compliant RWA tokens into relevant jurisdictions, starting with the MiCA-compatible segment.
3. Long-term potential still untapped
True RWA disruption will come when tokenized stocks can be:
- Used as DeFi collateral
- Traded globally 24/7 without intermediaries
- Audited and redeemable in real time
We’re not there yet. But we’re watching the infrastructure evolve.
Final word
Tokenized stocks are not a scam — but neither are they the revolution many claim.
They are an intermediate step: one that can either become a gateway to open finance, or another layer of centralized control with better UX.
The difference lies not in the tech — but in who writes the rules underneath it.
Track deeper RWA developments at RatEx42.com
