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Tokenization of real-world assets is booming, from stablecoins that digitize fiat currency to new stock tokens that put shares on blockchain rails. The concept is the same—create a crypto token pegged to a real asset’s value—and it’s catching on. Just this summer, Robinhood launched a crypto-powered stock trading service in Europe, offering over 200 tokenized U.S. stocks and ETFs on an Arbitrum-based network. Stablecoins like USD Coin (USDC) are essentially “tokenized dollars,” and now companies aim to do the equivalent for equities. Yet a critical difference lies beneath the surface: Stablecoins have thrived thanks to a lucrative issuance model, while tokenized stocks face unanswered questions about who profits from their issuance.
In other words, the real challenge with tokenized stocks isn’t technical details like trading hours or dividend mechanics but a financial one. Stablecoin issuers unlocked a revenue engine by investing reserve assets, something stock token providers can’t easily replicate. As a result, stablecoins have grown into a massive market exceeding $250 billion, whereas tokenized equities remain a niche experiment. The thesis here is debatable but clear: Stablecoins and stock tokens may share the same tokenization DNA, but only the former currently incentivize issuers with a sustainable business model. Unless the “supply side” economics for stock tokens improve, their widespread adoption will lag.
RWA tokenization is booming, and traders will love tokenized stocks
The total value of tokenized real-world assets has surged in recent years. Much of this growth comes from tokenized private credit and U.S. Treasury assets, while tokenized stocks account for under $400 million. This highlights that although interest in RWA tokenization is rising, equity tokens are still a tiny sliver of the market.
The push to tokenize stocks is gaining momentum amid this broader RWA boom. Robinhood’s foray is a prime example—the popular brokerage is now offering zero-commission, 24/5 trading of U.S. stock tokens to European investors. These tokens trade around the clock on weekdays (even when U.S. exchanges are closed), expanding access across borders. Robinhood touts full dividend support as well, promising that stock token holders will receive any payouts just like real shareholders. In short, the technical barriers, such as how to handle dividends, stock splits, or off-hours pricing, are being addressed through design choices (for instance, limiting trading to 24/5 and crediting dividends via the app). Other crypto firms have dabbled in this arena, too; for example, Gemini offered a tokenized MicroStrategy stock (MSTR) for its users.
However, tokenized equities remain in their early days. Despite the hype, their uptake is modest. Part of the reason is regulatory: stock tokens are unequivocally securities, so offering them requires brokerage licenses and regulatory approval. This reality was underscored in 2021 when Binance, which had launched tokenized shares of Apple, Tesla, and others, abruptly halted its stock tokens after global regulators warned it was operating without proper authorization. Complying with securities laws adds complexity and limits who can issue or trade these tokens, slowing their growth. But regulation aside, there’s a deeper reason stock tokens haven’t exploded in popularity: the economics for issuers just aren’t as compelling as they are for stablecoins.
Stablecoins have a built-in yield advantage while stock tokens face financial hurdles
Stablecoins have turned high interest rates into easy profits, making billions by investing user deposits into safe, short-term bonds. For example, Circle earned over 99% of its 2024 revenue, around $1.67 billion, from interest on USDC reserves, allowing it to share hundreds of millions with Coinbase, its key partner. Similarly, Tether (USDT) generated roughly $14 billion in profits by holding billions in Treasury bills.
Tokenized stocks, however, lack this guaranteed yield. Platforms holding underlying shares gain no direct financial benefit, as dividends must pass directly to token holders. Stock lending is an uncertain and limited revenue source, and trading fees might not be enough, especially if investors prefer buying and holding long-term (as I suspect might be the case). Thus, stablecoins effortlessly monetize reserves, while tokenized stocks must find new financial incentives to match stablecoins’ lucrative business model.
The road ahead for stock tokens remains uncertain
Real-world asset tokenization is often heralded as a bridge between traditional finance and crypto, and there’s good reason for excitement. As we described above, stablecoins have already proven that bringing off-chain assets on-chain can unlock enormous value and utility, effectively becoming the backbone of crypto trading.
Tokenized stocks extend that vision: imagine 24/7 globally accessible equity markets, fractional shares for all, and seamless settlement on a blockchain. The appeal for investors is clear, and I don’t question the demand side. But for this vision to fully materialize, the incentives for token issuers must be aligned. Right now, a stablecoin issuer gains a financial windfall from every token minted (thanks to reserve yields), whereas a stock token issuer gets comparatively little upside for providing the service. Until a sustainable business model emerges, whether through novel fee structures, participation in on-chain lending markets, or other innovations making the issuance more affordable, stock token offerings may remain limited in scale and number.
None of this is to say that tokenized stocks have no future. On the contrary, the early moves by firms like Robinhood suggest there is strategic value in being an early adopter of RWA tokenization, even if direct profits are slim. It can attract a new user base and position a company at the forefront of a potentially huge market in the long run. Over time, as the ecosystem matures, creative solutions could make stock tokens more rewarding to issue. For instance, platforms might tokenize baskets of equities or indexes with built-in management fees or integrate DeFi yield strategies to enhance returns.
For now, however, the contrast is stark: stablecoins thrive because their issuers profit handsomely from them, while tokenized stock issuers are still figuring out how to make the economics work. This fundamental difference, not technology or regulation, will determine how quickly RWA stock tokens catch up to their stablecoin cousins in the crypto economy. The concept of stock tokenization is undeniably promising, but until the question of “who gains and how” is resolved, its path to mainstream adoption will remain cautious and uncertain.
