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Global regulators and exchange groups are sounding the alarm on tokenized stocks. They say these blockchain-based shares copy real equities but lack the built-in protections of traditional markets.
A United Front Against Tokenized Equities
The European Securities and Markets Authority (ESMA), the International Organization of Securities Commissions (IOSCO), and the World Federation of Exchanges (WFE) wrote to the SEC’s Crypto Task Force. They urged tighter rules, warning that investors could face major risks.
“Fake Stocks” Concerns
The WFE said too many brokers are pitching tokenized U.S. stocks as if they are real. But they are not. They look like equities, trade like equities, yet they don’t carry the legal rights or protections that come with actual shares.
Why It Matters
The pushback comes just as tokenization gains traction. The value of tokenized assets has passed $26 billion. While tokenized stocks remain small, big names like Coinbase, Kraken, and Robinhood are eyeing the sector.
Lobbying Battles
This fight echoes earlier clashes. Traditional banking groups already blocked yield-paying stablecoins through the GENIUS Act, keeping money market funds safe from competition. Now, exchanges and regulators are teaming up to slow tokenized equities.
SEC’s Mixed Signals
The SEC isn’t dismissing tokenization altogether. Chair Paul Atkins recently called it an “innovation” worth exploring. Commissioner Hester Peirce, however, reminded that tokenized securities must still obey existing securities laws.
