Tokenized Stocks vs Shares: A Tale of Two Investing Worlds

Tokenized stocks and shares are often used interchangeably in discussions about investing, but they have distinct differences. Tokenized stocks represent ownership as a token on a blockchain, rather than a paper certificate or updated internal database.

This changes who can invest and when, as trading can continue almost around the clock with no distinction between time zones or weekends. Investors can also purchase a fraction of a share, making it easier for those with smaller budgets to enter the market.

However, tokenized stocks are still developing equivalent safeguards to traditional shares, which offer legal recognition and protection through established regulatory frameworks. Tokenized stocks are often categorized into three types: equity-backed tokens, synthetic tokens, and security tokens.