Behind the tokenization of US stocks: a return of a narrative, or a signal of the evolution of Web3 financial structures?

Author: JiaYi

Recently, every time I open Twitter, it's filled with discussions about tokenized US stocks. It's not an exaggeration to say that if you haven't been talking about this in the past few days, you might be out of touch with the market.

"US stocks on-chain" is the biggest hot topic in the market this week. Robinhood has launched stock tokenization services in Europe, while xStocks has also landed on Kraken and Bybit; Solana DEX and the Arbitrum ecosystem have started listing trading pairs like AAPLx and TSLAx, rapidly spreading this new narrative of stock tokenization.

But if you only see the hype and haven't understood the structure, you might become a victim in this narrative.

In my view, stock tokenization is essentially not about "issuing a token," but rather a stress test for on-chain finance:

Can the Web3 world truly support the issuance, trading, pricing, and redemption of mainstream financial assets?

Not just hype, but a structural stress test for on-chain finance

From my perspective, our industry's narrative is continuously evolving. As early as 2019, both Binance and FTX attempted to tokenize US stocks, but were ultimately halted by regulators. Mirror Protocol simulated US stock prices with synthetic assets, but also collapsed alongside the Terra crash and SEC regulation. This was not a new concept; the industry simply wasn't mature enough at that time.

Today's stock tokenization is not a reckless experiment, but a compliant path led by licensed institutions like Robinhood and Backed Finance. This is a crucial turning point.

Taking Robinhood as an example, its newly launched stock tokenization service in Europe follows an unprecedented "broker-dealer self-operated + on-chain issuance" closed-loop model.

They are not just displaying a price on-chain; instead, Robinhood is licensed in the EU, purchasing actual US stocks, and issuing 1:1 mapped tokens on-chain. From custody and issuance to clearing and settlement, the entire process is integrated, making the trading experience akin to a combination of a securities account and a wallet.

Initially, they deployed these tokens on Arbitrum to ensure controllable speed and costs for on-chain transactions, and they plan to migrate to a self-built Robinhood Chain, meaning they will have full control over the infrastructure.

Although voting rights cannot be opened yet to avoid governance-related regulations, the overall structure is already taking shape: it seems to establish an almost independently operable "on-chain securities trading system" at a structural level.

For the crypto industry, this is the first time we see a traditional internet brokerage not only having autonomy on the issuance side but also deconstructing the on-chain structure of assets.

From reckless experiments to compliant closed loops

The recent surge in stock tokenization, as I have repeatedly pointed out, is not a coincidence. Essentially, several core variables have resonated at the same time. The so-called right timing, location, and people are probably just that.

First, there has been a loosening of regulatory constraints and a clear direction. For example, Europe's MiCA has officially landed, and the US SEC is no longer hammering down indiscriminately, starting to release signals that "negotiations can happen, and actions can be taken."

Robinhood's rapid launch of stock token services in the EU relies on its securities license obtained in Lithuania; xStocks being integrated by both Kraken and Bybit is also supported by its compliant structure established in Switzerland and Jersey.

At the same time, as on-chain funds are indeed looking for new asset outlets, the structure of on-site funds has changed. The gap between traditional financial markets and non-MEME crypto markets will only continue to narrow.

Looking at the present, there are numerous projects on-chain without fundamentals but boasting extremely high FDVs, with liquidity piled up and nowhere to go. More cautious funds are starting to seek "anchored and logical" asset allocation outlets. At this moment, traditional players like Robinhood and xStocks, with their compliant structures and trading experiences, bring attractiveness to stock tokens. They are familiar, stable, have narrative space, and can be paired with stablecoins and DeFi.

The integration of TradFi and Crypto is deepening. From BlackRock to JPMorgan, from UBS to MAS, traditional financial giants are no longer just watching from the sidelines; they are genuinely building chains, running pilots, and engaging in infrastructure development. As the most mainstream and recognizable asset, stocks will clearly become a priority for tokenization.

Traditional assets on-chain: an opportunity for crypto or a threat to projects?

Jiayi's subjective viewpoint:

Looking ahead, stock tokenization is unlikely to follow an explosive growth curve, but it may become a highly resilient path for infrastructure evolution in the Web3 world.

The significance of this narrative lies in its ability to leverage two important structural changes: first, the boundaries of assets are genuinely beginning to migrate on-chain; second, the traditional financial system is willing to organize part of its trading and custody processes in an on-chain manner. Once established, these two changes are irreversible.

So, is it good or bad for stocks to come in and compete for liquidity in crypto projects?

In my view, this is a typical double-edged sword. It brings higher quality assets but may also subtly rewrite the flow structure of on-chain funds.

From a positive perspective:

1. The entry of traditional finance's "blue-chip assets" provides new outlets for on-chain funds and adds options for "stable asset" allocation. In a market where narratives shift too quickly and funds wander long-term, these clearly structured assets with real anchors help liquidity regain its basic coordinates of "where to allocate and what can be allocated."

2. This will also bring about a "catalyst effect." The strong narrative asset of US stock tokenization raises the benchmark across the chain, inevitably pushing the overall quality of Web3 projects upward. Let the junk projects be eliminated by the market, to be honest.

3. Crypto players can directly purchase stocks in a Crypto Native manner, reducing the liquidity drain of US stocks on the large pool of Crypto.

But conversely:

1. It may also put pressure on crypto-native projects. Not only will the narrative be snatched away, but the structure of on-chain funds and user preferences will also be gradually reshaped. Especially when the liquidity of tokenized stocks rises and starts to engage in perpetual contracts, lending, and portfolio allocation, it will directly compete for stablecoin flow, mainstream users, and attention on-chain.

2. For project teams: fundraising will become more challenging. When AAPLx, TSLAx, and potentially tokenized private equity from OpenAI or SpaceX appear in the on-chain asset pool, investors' and users' intuitive judgments about "what is worth investing in" and "what has pricing anchors" will shift.

Stock tokenization prompts us to rethink: Is Web3 truly a system capable of supporting mainstream assets and real trading behaviors? Can we use an open financial structure to rebuild a securities system with lower friction and higher transparency than traditional markets?