Tokenized stock market capitalization surpasses $1.2 billion, reaching a new high, replicating the "stablecoin myth" and entering the fast lane

According to industry data platform Token Terminal’s statistics, the total market capitalization of tokenized stocks has surpassed $1.2 billion, reaching a record high, with particularly notable growth in September and December 2025. This rapid momentum has been likened by industry experts to the “stablecoin boom of 2020” and the “early DeFi prosperity,” marking a shift where blockchain technology is moving from mere cryptocurrency trading to a systemic reshaping of core global financial assets. This growth has been driven by substantial involvement from traditional financial giants like Nasdaq and BlackRock, as well as regulatory clarity brought about by the US GENIUS Act. Tokenized stocks are no longer a fringe concept; they are becoming the most representative frontier in the trend of bringing real-world assets onto the blockchain.

Echoes of History: Tokenized Stocks Replicating the Rise of “Stablecoins” and “DeFi”

The tokenized stock market surpassed $1.2 billion in market cap by the end of 2025, a milestone that prompts seasoned industry observers to recall several key cycles from the past. Token Terminal made a clever analogy in its market commentary: “Today’s tokenized stocks are like the stablecoins of 2020.” The core of this analogy highlights the similar developmental stages and historical missions of both. In early 2020, the total market cap of global stablecoins hovered around $20 billion, with their potential as “bridge assets” connecting traditional fiat currencies and the crypto ecosystem beginning to emerge, though not yet widely accepted. Who could have predicted that within just a few years, stablecoins would grow into a $260 billion infrastructure-level market, forming the liquidity and settlement backbone of the entire crypto economy?

Currently, tokenized stocks are at a similar inflection point. They share the underlying logic of “bridge assets” with stablecoins: stablecoins bridge monetary value, while tokenized stocks bridge the core asset class of company equity in the traditional financial world. Their development paths follow the pattern of “solving real pain points, attracting institutional pilots, and ultimately triggering network effects.” The pain points addressed by tokenized stocks are clear—they aim to bring near real-time settlement, 24/7 trading windows, low-threshold fractional ownership, and programmable additional features to global stock trading. These features are disruptive to traditional settlement systems and particularly attract high-frequency traders, cross-border investors, and investment institutions seeking innovative tools.

Some analysts even compare this wave to the DeFi explosion of summer 2020. This comparison is not only based on similar growth curves but also on the depth of transformation. The rise of DeFi proved the feasibility of rebuilding permissionless markets for credit, trading, and derivatives on blockchain. Now, the exploration of tokenized stocks signifies that this grand experiment is shifting from building new financial building blocks to “on-chain transformation” of the largest and most heavily regulated traditional financial systems. It indicates a fundamental evolution in the narrative of blockchain adoption—from “investing in cryptocurrencies” to “holding and trading all assets on the blockchain.” This is not just market expansion but a true reflection of blockchain’s positioning as the internet of value.

Giants Competing: Traditional Finance and Crypto-native Forces Dancing on a New Track

The explosive growth of the tokenized stock market in the second half of 2025 is backed by a strategic landscape jointly mapped out by traditional financial giants and crypto-native innovators. The broad participation and high levels of investment clearly indicate that asset tokenization has moved from proof-of-concept to a productization and scale-up race. Crypto-native companies continue to play pioneering roles; for example, Backed Finance launched the xStocks product on Ethereum in September, collaborating with exchanges like Kraken and Bybit to bring approximately 60 tokenized stocks to market, providing initial education and liquidity.

However, the true market-defining and mainstream confidence-giving players are the top-tier traditional financial institutions. Nasdaq, a global top securities exchange, has officially submitted an application to the U.S. Securities and Exchange Commission to offer tokenized stock trading on its platform. Its head of digital assets strategy, Matt Savarese, described this initiative as a “top strategic priority,” sending a clear signal to the entire traditional financial industry. Meanwhile, asset management giant BlackRock, investment banking leader Goldman Sachs, and others, after deep involvement in Bitcoin and Ethereum spot ETFs, are channeling their resources and visions into the broader asset tokenization field. Their participation is not merely technical experimentation but a substantive long-term strategic deployment.

Other key players are also taking action to shape the direction. Tokenization specialist Securitize announced plans to introduce compliant on-chain public stock trading, emphasizing “direct equity ownership,” aiming to address core issues of transparency and trust. Another major tokenization firm, Ondo Finance, plans to launch tokenized US stocks and ETFs on the Solana blockchain in early 2026, reflecting expectations for high-performance public chains to enhance trading experience. Additionally, mainstream CEXs like Coinbase have announced plans to incorporate stock trading into their services, aiming to build a “universal exchange” that offers one-stop crypto and traditional asset services.

Major participant institutions’ strategic layout overview

The driving force of this market exhibits a diversified integration. Traditional financial institutions such as JPMorgan and Citibank, though relatively cautious, have publicly expressed strong interest in digital asset businesses and have begun applying for relevant licenses and infrastructure development. Their core advantages lie in extensive client networks, deep compliance experience, and unparalleled credit backing. Crypto-native companies excel in technological agility, profound understanding of blockchain characteristics, and existing crypto user bases. These two forces are not simply competing but are more often cooperating and competing in a complex dynamic. For example, traditional institutions need to collaborate with crypto technology providers to rapidly build capabilities, while crypto firms require licenses and compliance frameworks from traditional institutions to access more mainstream assets and clients. This fusion constitutes the most prominent current development feature of the tokenized stock market: under clear regulatory guidance, the stability of traditional finance and the innovation of the crypto world are undergoing unprecedented chemical reactions.

Regulatory Foundations: How Legal Clarity Sparks Institutional Demand

Any large-scale financial innovation must navigate through regulatory fog. The breakthrough progress of tokenized stocks in 2025 is fundamentally driven by decisive advances in crypto regulation, especially in the US. On July 18, 2025, the U.S. President signed the “Guidance and Establishment of the U.S. Stablecoin National Innovation Act” (the “GENIUS Act”), marking a watershed in U.S. digital asset regulation history. Its significance extends beyond stablecoins; it signals a major shift in U.S. regulatory philosophy—from early ambiguity and selective enforcement to actively establishing systematic rules that provide a predictable legal environment.

The GENIUS Act and its related “Digital Asset Market Clarity Act” jointly clear the most critical barriers for tokenized assets. They explicitly delineate the regulatory boundaries between security tokens and commodity tokens, clarifying jurisdiction between the SEC and CFTC. This provides a clear compliance roadmap for issuing assets like tokenized stocks that are explicitly anchored to real equity. Issuers can precisely understand the disclosure obligations and asset custody standards they need to meet. More importantly, the legislation paves the way for federally regulated banks to participate in issuing, custody, and trading digital assets. This is why we see traditional banking giants like JPMorgan and Citibank actively preparing related businesses, as the long-standing legal risks have been significantly reduced.

Looking back at the overall performance of the crypto market in 2025, a core feature is that the bull market of assets like Bitcoin was mainly driven by institutional funds; for example, net inflows into U.S. spot ETFs reached $44.2 billion between 2024 and 2025, with retail participation remaining limited. The fundamental logic behind this is “regulation implementation releases institutional demand.” The same logic is now playing out in the field of tokenized stocks. When market leaders like Nasdaq and BlackRock dare to publicly promote and declare tokenized stocks as strategic priorities, it indicates that their rigorous legal and compliance teams have completed assessments based on the new regulatory framework. This “compliance first, then business” model ensures sustainable development and avoids the massive policy risks associated with early unregulated crypto markets.

Other major financial centers worldwide are also building their regulatory frameworks, such as the EU’s MiCA regulations, which have begun implementation, and jurisdictions like Hong Kong and Singapore that continue to update their virtual asset service provider regulations. Although rules differ, this global regulatory race and coordination provide relatively stable expectations for cross-border capital participation in the tokenized asset market. It transforms tokenized stocks from an isolated experiment limited to certain jurisdictions into a new asset class with global liquidity and interoperability potential, attracting international capital seeking more efficient and transparent investment channels.

Future Outlook: Challenges and the Path to a Trillion-Dollar Market

Looking from the current $1.2 billion market cap into the future, the potential of the RWA (Real-World Asset) track led by tokenized stocks remains largely underestimated. In the short term, the market is expected to continue its rapid growth. More financial institutions will launch their own tokenized products as pilots, with ETF tokenization likely becoming the next hotspot, as it can meet investors’ diversification needs through a basket of assets. As top exchanges like Nasdaq officially open their platforms, a deeper liquidity secondary market with more effective price discovery is expected to form, attracting professional market makers and more alpha-seeking institutional investors, creating a growth flywheel of “more assets listed – better liquidity – more users attracted.”

However, the road to a trillion-dollar scale is not smooth; it requires overcoming a series of technological and ecological challenges. Currently, the development of tokenized stocks exhibits a “multi-chain progression” pattern, with products mainly issued on public chains like Ethereum and Solana. While offering flexibility, this also leads to liquidity fragmentation and complex cross-chain interoperability issues. Building middleware technology stacks capable of seamlessly linking traditional financial systems with multiple blockchain networks is crucial. This involves compliant asset issuance and off-chain custody, reliable oracle price feeds, user-friendly fiat on/off ramps, and institutional-grade security and risk control systems. Any weak link could become a bottleneck for large-scale adoption.

Furthermore, the widespread adoption of tokenized stocks will inevitably trigger profound impacts on existing financial market structures and raise new regulatory and ethical issues. On one hand, it may divert some trading volume from traditional exchanges and pose long-term challenges to business models relying on conventional settlement cycles. On the other hand, the “double-edged sword” effect of regulation will persist. For example, during market volatility at the end of 2025, some on-chain funds withdrew due to concerns that new legislation might impose overly strict regulations on DeFi protocols. For tokenized stocks, balancing the transparency and efficiency brought by blockchain with traditional “know your customer,” anti-money laundering, and tax reporting requirements will be an ongoing compliance challenge. Security audits of smart contracts, stability of liquidation mechanisms under extreme market conditions, and other technical priorities must be addressed proactively.

From a broader historical perspective, tokenization technology may ultimately redefine paradigms of asset ownership and exchange. It is not merely about digitizing existing stocks but also about creating unprecedented asset forms and financial products. For example, tokenizing complex assets like real estate, private equity, intellectual property, or even carbon emission rights can significantly enhance their capital efficiency and liquidity. Companies might bypass traditional investment banks and directly raise global financing through compliant tokenized securities. If combined with central bank digital currencies and automated smart contracts, this could outline a more programmable, open, and inclusive future financial landscape. Although the path ahead involves technical hurdles, regulatory battles, and market cycles, the fundamental goal of tokenized assets—to enable value to flow more freely and efficiently—gives them strong intrinsic momentum. From today’s “stablecoin moment” to future mainstream allocation, the journey of tokenized stocks may just be beginning a remarkable new chapter.