Tokenization of US Stocks: Structural Stress Testing in Web3 Finance

Recently, the tokenization of US stocks has become the focal topic in the crypto market. Robinhood has launched stock tokenization services in Europe, and xStocks has also simultaneously landed on multiple trading platforms. A certain DEX and a certain L2 network have begun to list trading pairs for tokenized stocks such as Apple and Tesla, and this new narrative has quickly swept across the entire market.

However, focusing solely on the hype while ignoring the underlying structure may put investors in a difficult position. In fact, stock tokenization is not just about simply issuing Tokens; it is a comprehensive stress test of on-chain finance: Can the Web3 ecosystem truly support the issuance, trading, pricing, and redemption of mainstream financial assets?

Structural Challenges of On-Chain Finance

Looking back at history, we can find that the industry narrative develops in cycles. As early as 2019, several trading platforms attempted to tokenize US stocks, but ultimately had to terminate due to regulatory reasons. Projects that used synthetic assets to simulate US stock prices also failed due to market fluctuations and regulatory pressures. These attempts were unsuccessful at the time due to the industry's insufficient maturity.

Today, stock tokenization is no longer a grassroots experiment, but a compliant path led by licensed institutions. This is a key turning point. For example, a well-known brokerage has launched a stock tokenization service in Europe that adopts an unprecedented "broker self-operated + on-chain issuance" closed-loop model.

This model is not just about posting prices on the chain, but rather it involves brokers licensed in the EU purchasing real US stocks and issuing tokens that are 1:1 mapped on the chain. From custody, issuance to clearing and settlement, and user interaction, the entire process is integrated, and the trading experience is essentially a combination of a securities account and a wallet.

In the early stages, these tokens were deployed on a certain L2 network to ensure that the speed and cost of on-chain transactions are controllable. There are plans to migrate to a self-built blockchain in the future to achieve control over the entire infrastructure. Although voting rights cannot be opened temporarily to avoid governance-related regulations, the overall structure has already begun to take shape: it is building an "on-chain securities trading system" that can almost operate independently.

For the cryptocurrency industry, this is the first time traditional internet brokerages have not only autonomy in the issuance end but have also conducted a thorough deconstruction of the chain structure of assets.

From Experimentation to Compliance: Catalysts of Change

The rise of the stock tokenization craze is not a coincidence, but rather the result of multiple core factors resonating at the same time.

First, the regulatory environment has loosened, and the direction is clearer. The European crypto asset regulatory framework has been officially implemented, and the U.S. Securities and Exchange Commission has also begun to release some positive signals. A well-known brokerage firm has been able to quickly launch stock Token services in the EU, relying on the securities license obtained in Lithuania. xStocks can be accessed by multiple trading platforms simultaneously, which is also due to its compliance structure established in Switzerland and Jersey.

At the same time, on-chain funds are looking for new asset outlets, and the structure of on-site funds is changing. The gap between traditional financial markets and non-MEME crypto markets is narrowing. Currently, there are many projects on-chain that lack fundamentals but are overvalued, and steady funds are beginning to look for "anchored and logical" asset allocation outlets. At this time, licensed institutions enter the market with compliant structures and high-quality trading experiences, making stock tokens naturally attractive. They are both familiar and stable, have narrative space, and can connect with stablecoins and the DeFi ecosystem.

The integration of traditional finance and the crypto world is becoming increasingly deep. From large asset management companies to global financial giants, from Swiss banks to the Monetary Authority of Singapore, traditional financial giants are no longer just observing but are truly participating in the construction of blockchain infrastructure. As the most mainstream and recognized asset, stocks naturally become the preferred choice for tokenization.

Opportunities and challenges coexist

Looking ahead, stock tokenization may not exhibit explosive growth, but it is expected to become a highly resilient infrastructure evolution path in the Web3 world.

The significance of this narrative lies in driving two important structural changes: first, the asset boundaries are beginning to truly migrate on-chain, and second, the traditional financial system is starting to adopt on-chain methods to organize certain transaction and custody processes. Once these two trends are established, they will be irreversible.

For crypto projects, stock tokenization is both an opportunity and a challenge. On the positive side:

1. The entry of traditional finance's "blue chip assets" provides a new destination for on-chain funds and adds options for "stable asset" allocation. In a market where narratives rapidly rotate and funds flow in the long term, these clearly structured assets with real-world anchors help liquidity to rediscover its fundamental coordinates.

2. This will produce the "Catfish Effect". The emergence of tokenization of strong narrative assets in the US stock market has raised the benchmark for all on-chain assets, which will inevitably drive the overall quality improvement of Web3 projects.

3. Crypto users can directly purchase stocks in their native form, reducing the absorption of liquidity from the US stock market into the crypto market.

However, challenges also exist:

1. Native crypto projects will face pressure. Not only will the narrative space be squeezed, but the on-chain capital structure and user preferences will also gradually reshape. Especially when the liquidity of tokenized stocks increases and begins to venture into perpetual contracts, lending, and portfolio configuration, it will directly compete with native assets for stablecoin flow, mainstream users, and on-chain attention.

2. For project parties, financing will become more difficult. When tokenized stocks of well-known technology companies appear in the on-chain asset pool, and in the future may even include tokenized private equity from well-known AI or aerospace companies, the criteria for investors and users regarding "what is worth investing in" and "what has a pricing anchor" will change.

The tokenization of stocks prompts us to rethink: Can Web3 truly support mainstream assets and real trading behaviors? Can we rebuild a securities system with lower friction and higher transparency than traditional markets through an open financial structure? The answers to these questions will gradually be revealed in future developments.