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Glossary entry

Tokenized Stock

Also known as: tokenized equity · stock tokens · xStocks · on-chain stock

A tokenized stock is a blockchain-issued token whose price tracks an underlying public equity, typically fully or partially backed by the actual share held in custody.

Tokenized stocks represent a category of crypto-native financial product where a custodian holds shares of a US-listed equity and issues a 1:1 blockchain token claim against them. The tokens trade 24/7 on crypto exchanges or DEXs, settle in seconds, and can interact with DeFi protocols (lending, perpetual futures, structured vaults).

Notable examples: Backed Finance's xStocks (TSLAx, AAPLx, NVDAx, etc.) trade on Kraken and Bybit; Robinhood's EU-only Stock Tokens issued on Arbitrum; Binance Alpha and Ondo Finance tokenizing select US equities; and HIP-3 perpetual contracts on Hyperliquid that reference public stocks without holding them.

Tokenized stocks are explicitly not available to US persons under current SEC interpretation — the issuance is generally restricted to non-US KYC'd users. Tracking is mechanical (issuer redemption) rather than algorithmic, so prices stay close to the underlying during regular hours but can diverge in the overnight window when the spot market is closed. Dividends are paid through token rebasements or stablecoin distribution.

Tokenized stocks remain a niche product. Liquidity is concentrated in a handful of mega-cap names and total notional outstanding is small relative to a single S&P 500 ETF. The category is interesting because it provides the only meaningful 24/7 retail price discovery for US equities and a programmatic on-chain settlement rail.

See also

  • Equity Perpetual Future — An equity perpetual future is a crypto-style perpetual contract whose price references a public equity, settled in stablecoins with funding payments instead of expiry.
  • Contract for Difference (CFD) — A CFD is a leveraged derivative contract between a trader and a broker that pays the difference in price between contract open and close — economically similar to an undelivered margined long or short.
  • 24-Hour Trading — 24-hour trading lets retail investors place orders on US equities outside the standard 9:30am-4:00pm ET session, typically Sunday evening through Friday evening.