Author: BUBBLE, BlockBeats

In recent years, more and more institutions and regulators in the traditional financial sector have begun to accept cryptocurrencies, and more and more crypto projects intend to comply with regulations in exchange for higher exposure. While the build is long-term, the outbreak is instantaneous, with the Trump administration taking office, the SEC's attitude change, the recent passage of the Stablecoin Act, and the crypto exchange Coinbase entering the S&P 500 index and other trend indicators.

This also made many previously prepared crypto projects and brokerage firms begin to "recklessly" carry out securities tokenization business, and on-chain "Nasdaq" emerged like mushrooms after rain.

Where else can I buy “on-chain stocks”?

Not only are "crypto" concept stocks popular among investors in the U.S. stock market, but the tokenization of U.S. stocks and securities in Crypto has also set off a wave of enthusiasm recently.

 Comparison of conceptual projects on securities tokenization in the crypto field, chart by BlockBeats

XStocks

Kraken is a long-established cryptocurrency exchange founded in 2011. On May 22, Kraken announced a partnership with Backed Finance to launch a tokenized stock and ETF trading service called “xStocks”. The first batch will cover more than 50 U.S.-listed stocks and ETFs including Apple, Tesla, and Nvidia.

The project will be issued exclusively on the Solana chain, which has also received strong support from Solana officials. Karken and several Backed team members also appeared at Solana Accelerate 2025 yesterday to express their views on the future of securities tokenization.

Bybit

Bybit was founded in 2018. In the field of stock tokenization, Bybit does not issue tokens, but supports tokenized asset trading as a trading channel, and cooperates with retail platforms such as Swarm to provide a trading market for stock or ETF tokens. It provides stock trading tools based on contracts for difference (CFDs), allowing users to participate in stock price fluctuations "without holding the underlying stocks." Its special feature is that it can open up to 5 times leverage.

Bybit also supports RWA token (such as TRAC) trading through copy trading functions and NFT markets, targeting selected users to invest in tokenized assets. It has now opened trading for 78 selected stocks such as Apple, Tesla, and Nvidia. The handling fee is 0.04 USDT per share, and the minimum charge for each order is 5 USDT.

Ondo

Ondo Finance is one of the projects with the most comprehensive infrastructure in the field of cryptographic "security tokenization". It is building a comprehensive RWA (tokenization system) covering asset issuance, liquidity management and underlying infrastructure. Its core products include two types of asset tokens, OUSG and USDY, as well as the liquidity protocol Nexus, the lending platform Flux and the upcoming compliance license chain Ondo Chain.

In February 2025, Ondo held its first Summit in New York, officially unveiling the design of its GM "Global Markets" platform, which aims to tokenize thousands of public securities around the world (such as Apple, Tesla, and S&P 500 ETF) and enable 24/7 trading and instant settlement on the chain. All tokens on the GM platform are backed by 1:1 physical securities, but the issuance and redemption process has built-in compliance authority control, and is aimed at markets outside the United States, striving to create "Wall Street 2.0."

In order to support its "grand strategy", Ondo also announced the launch of the Ondo Chain, a compliance chain for institutions. The chain adopts a semi-permissioned architecture that allows anyone to issue and develop, but the verification nodes are served by well-known financial institutions to ensure compliance and security. The chain natively supports financial operations such as dividends and stock splits, and introduces an on-chain reserve proof mechanism to ensure that tokens are fully backed by assets. The goal is to become the infrastructure for traditional financial core operations such as on-chain prime brokerage and cross-asset mortgages in the future. On May 19, Kinexys, a subsidiary of JPMorgan Chase, and Ondo Chain executed the first cross-chain "cash on delivery" transaction "Delivery vs Payment".

Although GM and Ondo Chain have not yet been officially launched, the core assets of the Ondo ecosystem, OUSG and USDY, have reached a scale of 545 million and 634 million US dollars respectively. Among them, OUSG is mainly held by institutions on Ethereum, while USDY shows a higher retail user adoption rate on Solana.

It is worth noting that most members of the Ondo team come from top institutions such as Goldman Sachs and McKinsey, and actively participate in communication and coordination with US regulatory agencies such as the SEC and CFTC, and are deeply involved in policy making, compliance design and public relations, including inviting former Congressman Patrick McHenry to join the advisory committee, fully demonstrating its ambition and resource integration capabilities to build a bridge between traditional finance and the crypto industry.

Securitize

In the gradually compliant crypto industry, there are also companies that have "strong relationships" with the government and securities firms, such as Cantor, which is responsible for 99% of Tether's Treasury bond purchases and is one of the 24 major dealers of the U.S. Treasury Department. Cantor is directly involved in Treasury bond issuance and trading and maintains close business dealings with the Federal Reserve and the Treasury Department. The cooperation between the two parties has enabled Tether to achieve US$2 billion in Treasury bond revenue alone in 2023.

The combination of Cantor and Tether is not an isolated case. The BUIDL fund established by BlackRock, the world's largest asset management company, in 2024 has become a leader in the RWA track with an asset management scale of more than 2.5 billion this year. The designated custodian of BUIDL is Securitize, which was established in 2017 and focuses on blockchain technology and digital asset securitization.

But unlike traditional crypto companies, Securitize's management is full of Wall Street executives, and Brett Redfearn, the former director of the SEC's trading and markets division hired by Securitize in 2021, still serves as the CEO's senior strategic advisor and chairman of the advisory board. Securitize also has a close relationship with Paul Atkins, the newly appointed SEC chairman, and Securitize. Paul Atkins joined Securitize as early as 2019, served as a member of the advisory committee and board of directors, and held call options of up to $500,000. He just stepped down in February of this year. Coincidentally, in 2019, Securitize became an SEC-registered broker-dealer and an SEC-regulated alternative trading system (ATS) operator.

On the eve of "compliance", Securitize may also become one of the best ways to bridge encryption and traditional finance with its compliance "background".

Snatch food from a tiger's mouth?

Signs of brokerage firms' involvement in cryptocurrencies began even earlier, with several stock exchanges trying to integrate crypto businesses many years ago.

 Comparison of data of major securities companies before and after adding the "encryption concept", chart: BlockBeats

Toro is an Israeli financial technology company founded in 2007, which first launched Bitcoin trading services in 2013. Subsequently, eToro continued to expand its digital asset product line, gradually adding trading support for mainstream cryptocurrencies such as Ethereum, Ripple (XRP), and Litecoin.

RobinHood may be the most well-known securities company in the Crypto circle. It entered the crypto field as early as 2018 and was widely known during the Trump Coin era. After the company announced the acquisition of European digital asset trading platform Bitstamp for US$200 million, Robinhood entered Singapore in March this year, using Bitstamp to obtain regulatory approval and integrate into Singapore's crypto-friendly framework. Bitstamp has obtained the principle approval of the Monetary Authority of Singapore (MAS), which provides Robinhood with significant regulatory advantages and simplifies its market entry process.

Robinhood differentiates itself from offshore platforms that operate in a legal gray area by prioritizing regulatory compliance, which is one of the advantages that traditional brokerages have over some Crypto CEXs in promoting global token securitization.

Robinhood's expansion in Singapore is part of its larger international growth strategy, having previously launched crypto trading in Europe and stock options trading in the U.K. With the expansion of its license, Robinhood is now offering a full range of services, including digital and traditional finance, in multiple regions.

This month, Robinhood also accelerated the process of tokenizing its securities market. On May 8, Robinhood announced plans to launch a blockchain-based platform for trading U.S. assets in Europe. On May 20, Robinhood submitted a 42-page proposal to the U.S. Securities and Exchange Commission (SEC), proposing the establishment of a federal-level "RWA tokenization" framework to promote the modernization of the U.S. securities market.

Not only in Europe and the United States, some brokerages in Hong Kong also began to explore related fields last year. In June 2024, many Hong Kong brokerages began to provide trading services for virtual assets such as Bitcoin. Hong Kong brokerages such as Victory Securities, Tiger Securities, and Interactive Brokers have launched corresponding services. Some brokerages attach more importance to Crypto business and expect that their encryption business-related income may account for about a quarter of the company's income.

On May 7, 2025, Futu Securities also announced the official launch of Bitcoin, Ethereum, and USDT deposit services. Users can complete deposits and transactions of cryptocurrencies and traditional financial assets through Futu NiuNiu, including Hong Kong, US and Japanese stocks, options, ETFs, funds, bonds and other diversified assets, and quickly switch between virtual and traditional asset markets.

Those failed attempts and the dilemma of offshore platforms

In fact, as early as around 2020, "tokenized stocks" have been boldly tested by some crypto platforms. This model aims to map traditional stocks into tradable digital assets through blockchain technology, thereby breaking the many restrictions of traditional financial markets in terms of time, region, and threshold.

In this experiment, FTX is undoubtedly the most radical pioneer.

Around 2020, FTX took the lead in launching its tokenized stock trading function. Users can trade tokens of well-known US stock companies such as Tesla (TSLA) and Apple (AAPL) on its platform. These tokens are issued by its Swiss subsidiary Canco GmbH and are linked to real stocks hosted by third-party brokers, realizing a "1:1 anchoring" mapping relationship.

At that time, users could invest in popular US stocks 24/7 with a minimum of about $1 (Nasdaq's plan to absorb "global liquidity" later). In addition, users can also redeem actual stocks with tokens, although this process is limited by platform policies and compliance requirements in actual operations.

 Differences between FTX and Binance’s previous tokenized stock trading, chart: BlockBeats

In order to be "compliant", FTX cooperated with German financial services institutions CM-Equity AG and Digital Assets AG to jointly create a compliance framework to make these US stock tokens legal and financially compatible. However, this business ultimately failed to go further. In November 2022, FTX declared bankruptcy due to serious problems such as misappropriation of funds and fraud allegations, and its tokenized stock business was also terminated.

In April 2021, Binance also briefly entered the field of tokenized stocks, launching stock token products settled in its stablecoin BUSD. The first batch included star stocks such as Coinbase (COIN) and Tesla (TSLA), continuing to promote the concept of fractional investment.

However, the challenge facing Binance does not come from the market, but from regulatory pressure. Due to the lack of a unified regulatory framework for securities tokens, Binance first received questions from financial regulators in Italy, Germany, and the United Kingdom about its stock tokens, believing that they may constitute unauthorized securities issuance or trading. Subsequently, other countries such as Japan, the United States, Canada, Thailand, and the Cayman Islands have taken measures such as investigating Binance, filing criminal charges, or prohibiting the platform from operating in their countries.

On the other hand, as crypto exchanges and brokerage firms are chasing the market of securities tokenization, some discussions about this have emerged in the community. For "Crypto Native" funds, whether in the ICO era or the subsequent Memecoin boom, the return rate obtained after traditional interpretation of a company's PE, PS, business model, and financial report may be far less than what they were good at before, which will also lead to Crypto Native not being very fond of traditional stocks.

On the other hand, high net worth individuals in traditional fields are very interested in the "high yield" of Crypto assets or AI assets, but this was what Crypto CEX wanted to do before. As the businesses of both parties are getting closer, this type of customers will trust the platforms of traditional brokerages such as "RoobinHood, eToro, and Futu" more.

Stablecoin + securities on the chain, is the liquidity closed loop coming?

On May 22, David Sacks, the White House's director of cryptocurrency and artificial intelligence and the "crypto czar," said that the stablecoin bill would unlock trillions of dollars for the U.S. Treasury. Just the day before, the U.S. Senate voted to pass a "cloture motion" to formally review the GENIUS Stablecoin Act. At least 15 Democratic lawmakers changed their original positions and voted in favor. The bill will now enter a full review process, although only the "cloture motion" has been passed and the bill itself has not yet been passed.

However, the market is generally optimistic about the advancement of the GENIUS Act, which will provide a clear regulatory framework for the tokenization of securities, especially on the basis of stablecoins and RWA tokenization, and may be extended to stock tokenization. This will reduce the compliance risks of market participants and attract more institutional investors. Previously, projects such as Backed Finance and Securitize have launched tokenized stocks based on MiFID II and SEC regulations. If the GENIUS Act is passed, it may further accelerate growth.

After stablecoins are compliant, they may reduce the friction of cross-border transactions through blockchain technology and attract global investors to participate in the US market. In fact, many institutions and countries have begun to respond. On May 17, Moonpay cooperated with Mastercard to enable users to use stablecoins at more than 150 million locations around the world that accept Mastercard. These stablecoins will be able to be immediately exchanged for legal tender at the point of sale. On May 21, South Korean presidential candidate Lee Jae-myung proposed the issuance of a stablecoin based on the Korean won. At the same time, according to the Wall Street Journal, large commercial banks such as JPMorgan Chase, Bank of America, Citi, and Wells Fargo are discussing the joint issuance of stablecoins with Early Warning Services, the operator of the Zelle payment system, and Clearing House, a real-time payment network.

However, JPMorgan analysts disagree with David Sacks's remarks about trillions of dollars. He believes that although the US stablecoin regulatory framework is gradually advancing, the market's forecast that the total supply of stablecoins will triple or quadruple from the current approximately US$240 billion to nearly US$1 trillion in the next one to two years is "too optimistic."

Nevertheless, after years of development, the total amount of stablecoins now accounts for 1.1% of the US dollar supply. Due to their high yields and convenience, as well as the important role they may play in the future stage of global securities tokenization, they have, to a certain extent, reached a stage that traditional markets cannot ignore.

 Data from tokenterminal, current share of major stablecoins

The "tokenization" transformation of cryptocurrency is just like the transformation of the music industry from physical records to digital music at that time, from the chaos of the copyright storm caused by Napster to the rise of compliant platforms such as iTunes and Spotify. The process from chaos to compliance is not easy. But now, with the accelerated integration of encryption and securities, we are standing at the crossroads of this era. This process may also be full of uncertainty and risks, but perhaps a new era of more open, transparent and efficient finance is coming.