A market commentary by Johanna Belitz, Head of Nordics, and Jacob Lindberg, Chief Revenue Officer, at crypto ETP issuer Valour

The next major bridge between traditional capital markets and crypto may not emerge from Bitcoin, but from equities. Increasingly, traditional securities are being represented as digital tokens on the blockchain. These tokenized stocks promise what traditional stock trading has so far only been able to offer to a limited extent: 24/7 trading, faster settlement, fractional ownership, and lower costs. While this market remains small compared to traditional equity trading, its momentum is accelerating.
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According to the latest data, the monthly on-chain spot trading volume of tokenized shares across all blockchains reached a record high of around US$5.3 billion in May, a 44 per cent increase on the previous month. Derivatives add even more: perpetual futures on tokenized equities traded around US$34 billion on centralized crypto exchanges in the same month. On Solana, the cumulative transfer volume of share tokens exceeded US$10 billion for the first time in June. This remains a far cry from the volumes seen in traditional stock markets, where roughly US$1.1 trillion in equities changes hands every trading day, based on 2025 Cboe consolidated market data. But it points in a certain direction: once regulatory clarity is established, this small market could grow significantly.

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SEC temporarily backtracks over concerns regarding third-party tokens

This regulatory aspect is currently the critical turning point. The US Securities and Exchange Commission (SEC) had recently been working on an exemptive relief proposal for tokenized assets, which could have served as a regulatory sandbox for digital shares. Although the proposal had already been drafted and reviewed internally, it was temporarily shelved. The delay was reportedly driven by concerns surrounding third-party tokens, digital versions of stocks issued without the direct consent or involvement of the underlying companies.

While this delay represents a temporary setback for the broader adoption of equity tokens, it also highlights how seriously regulators and traditional financial players are now taking the topic. Securities on the blockchain are far more than just another crypto narrative. Instead, they touch the very core of capital market infrastructure: ownership, settlement, custody, voting rights, dividends, market oversight, and investor protection.

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What tokenized stocks actually are

Equity tokens are digital representations of traditional company shares on a blockchain. In its simplest form, the underlying share is held by a regulated custodian, while a corresponding token is issued on the blockchain to mirror the share's value. Ideally, this token is backed 1:1 by the underlying stock. Investors can thus gain price exposure to the security without necessarily trading through a traditional exchange or brokerage system. In addition, there are synthetic models, which do not necessarily hold the underlying stock but replicate its price performance using derivatives or other financial instruments.

Tokenized stocks are not a novel concept, as initial attempts were made during previous crypto cycles, but the market conditions have changed since the previous attempts. First, blockchain infrastructure has become significantly more powerful, with networks like Solana consistently enabling rapid transactions at negligible costs. Second, institutional interest in the tokenization of real-world assets (RWAs) has risen sharply. Money market funds, government bonds, and private credit products are increasingly being migrated to blockchain infrastructures.

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Markets do not keep exchange hours

The primary advantage of equity tokens is the potential for 24/7 trading. Traditional stock markets close in the evening, on weekends, and during holidays. The world, by contrast, does not stand still just because the stock market is closed. Money never sleeps, but the stock market does. Corporate announcements and geopolitical events can occur at any time. On-chain equities could allow investors to react to such developments in real time. Another advantage is settlement. While traditional securities markets have shortened their settlement cycles, they remain dependent on legacy clearing and custodial frameworks. On
the blockchain, by contrast, transactions can settle within seconds.

Although stock trading is digital today, the backend remains highly centralized. Clearing, settlement, custody, and registry maintenance are historically grown systems involving numerous intermediaries, making trading time-consuming and costly. Tokenization would both decentralize and automate parts of this infrastructure. The fewer intermediaries standing between buyer and seller, the lower the costs across the entire settlement structure. While blockchain transactions, custody, and platform fees still carry costs, the underlying technology enables significantly leaner processes.

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Third-party tokens could distort pricing

For now, regulation remains the highest hurdle. Equities are securities, regardless of whether they exist on paper, in a centralized registry, or as a token on a blockchain. The question of share structure is particularly sensitive. Depending on the jurisdiction and share class, owning a traditional stock grants specific entitlements, such as dividends, voting rights, or participation in corporate actions. With equity tokens, it is not automatically guaranteed that these rights will be fully passed through. Many products may initially offer market exposure rather than full shareholder status.

Furthermore, there is the risk of a diluted share structure. If third-party issuers launch tokens on equities without the involvement of the companies themselves, a parallel market emerges. As long as every token is fully backed, this does not increase the actual number of outstanding corporate shares. However, it becomes problematic if synthetic products with insufficient backing emerge, which could distort price discovery, drain liquidity, and erode market trust.
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Two rails to the same destination

The crypto-native wrappers are only half the story. The incumbent infrastructure is moving too, and on its own terms. In March, the SEC approved Nasdaq's framework for tokenized trading of Russell 1000 stocks and index ETFs, where the tokenized share carries identical rights and trades alongside the conventional one. The Depository Trust and Clearing Corporation, the utility that clears and safeguards most of the US securities market, begins limited production trading of tokenized securities this summer, with a broader launch planned for October. The New York Stock Exchange is building its own venue.

Investors are therefore looking at two rails to the same destination. One runs through existing market plumbing: full shareholder rights, familiar custody, settlement anchored at the central depository. The other runs through crypto-native platforms: global, open around the clock, often faster, but in many cases delivering price exposure rather than legal ownership. The SEC drew this line in January when it distinguished custodial tokenized securities, which carry full shareholder rights, from synthetic ones, which do not.

The practical question for investors isn't whether equities move on-chain. It's which rail they'e buying. What backs the token? Is there a claim on the underlying share, and against whom? What happens if the issuer fails? How is the price formed when the primary market is closed? Exposure is not ownership. The products that win this market will be the ones that answer these questions cleanly. That's a familiar lesson from the ETP world, where structure
decides outcomes.

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How investors can benefit from the tokenization trend

Access currently depends on geography. American retail investors still cannot buy tokenized stocks at home while the SEC finalizes its framework. German investors already can:

Robinhood offers more than 200 tokenized US stocks and ETFs to customers across the EU, Gemini distributes tokenized equities in Europe through its partnership with Dinari, and Frankfurt hosts 21X, an EU-approved exchange for tokenized securities. The gap reveals a quiet competition between regulators. Europe let distribution move first under existing securities rules, while the United States is building tokenization into its core market infrastructure. Which approach earns the trust of issuers and investors will decide where this market ultimately settles. For investors, the next question is which infrastructure stands to benefit from this trend. An obvious opportunity lies in the blockchain networks on which these tokens are traded and transferred. Solana is particularly interesting in this regard; due to its low fees and high throughput, the network is highly suited for applications requiring a high volume of microtransactions. If equity tokens indeed mature into a larger market, high- capacity, low-cost networks are poised to benefit.

At the same time, Ethereum remains highly relevant, as it hosts a vast portion of institutional DeFi and tokenization infrastructure. Many regulated products, stablecoins, and smart contract applications are deeply anchored in the Ethereum ecosystem. For equities specifically, consolidation has already happened: Solana settles more than 95 per cent of on- chain tokenized stock trading. The broader tokenization market tells a different story, with treasuries, funds, and institutional products anchored on Ethereum. Rather than one chain winning everything, each vertical settles where its requirements are best met: fast, cheap
execution on Solana, deep liquidity and institutional infrastructure on Ethereum.

Middleware deserves a mention too. Tokenized assets still need reliable price feeds and proof of reserves. Chainlink has become the default provider connecting to institutional pilots at Swift, Euroclear, and the Depository Trust & Clearing Corporation's Smart NAV initiative, alongside experiments run by JPMorgan and UBS. Its newer fee model converts a share of enterprise and on-chain revenue into LINK, held in a strategic reserve, one of the more direct attempts yet to tie protocol adoption to token demand. The caveat is that being essential infrastructure has not paid LINK holders for years: the token still trades well below its 2021 peak, and the reserve mechanism is too new to have been tested through a full market cycle.

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The next bridge between Wall Street and Blockchain

Tokenized stocks demonstrate that crypto should increasingly be viewed not as an adversary to the traditional financial system, but rather as its partner. The far more compelling development lies in the convergence of both worlds. Through this integration, traditional assets can become more decentralized, trade faster, and be accessed globally at lower costs. While the market is still small, regulation remains unclear, and product structures are complex, the direction of travel is clear: as equities, bonds, funds, and stablecoins increasingly migrate to blockchain infrastructures, a portion of the traditional capital market
will inevitably shift to public networks.

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