Blockchain-Backed Stocks: The Rise of Tokenized Securities

Tokenized stocks are blockchain-based representations of shares or economic interests linked to publicly traded companies. This means that ownership is recorded on the blockchain, rather than solely in conventional brokerage and securities databases.

While tokenized stocks may look similar to cryptocurrencies, they remain securities under federal law. In fact, the SEC's 2026 framework explicitly treats digital securities, including tokenized traditional securities, as securities under federal law.

The process of tokenizing a stock can vary depending on whether it is issuer-sponsored or held by a third party through a broker or custodian. For example, Ondo Stocks currently offers over 440 tokenized stocks and ETFs to eligible investors outside the US, with its products backed by stocks, ETFs, and cash held through US financial institutions.

However, owning a token does not automatically mean that you own the underlying stock. The rights associated with a token can vary significantly depending on the structure, and may include dividend economics but not traditional shareholder voting rights.