“We’re not looking at hype. We’re looking at Act One.” – Sygnum Research, August 2025

Tokenised stocks are having their moment — at least in the headlines. According to a detailed market note from Sygnum Bank, published August 13, the “tokenisation of publicly listed stocks” has moved from concept to commercial reality faster than many expected.

With BlackRock’s Larry Fink publicly urging the SEC to fast-track tokenisation earlier this year, and SEC Chair Paul Atkins confirming regulatory support for tokenised securities, multiple exchanges jumped in. Robinhood, Kraken, Bybit, Gemini, and soon eToro, now offer tokenised access to US equities.

Sygnum’s research shows that market cap and tokenholder numbers have grown rapidly since launch. However, traded volumes,  the lifeblood of any liquid market,  have begun to stall. The institutional flows that would mark the next growth phase are still missing. And according to Sygnum, the reasons are structural, not sentimental.

Why Tokenise Stocks?

• Speed – Reduce settlement from days to near-instant
• Access – 24/5 trading, global reach, fractional ownership
• Composability – Plug equities into DeFi lending, yield, and derivatives
• Cost efficiency – Lower fees, fewer intermediaries

What’s Really Being Sold?

Here’s where Sygnum’s analysis is blunt: the products on offer today are not on-chain shares. They are synthetic proxies that track price but do not carry enforceable shareholder rights.

Robinhood’s offering, for example, sits on Ethereum’s Arbitrum layer but remains locked within Robinhood’s own walled garden. The underlying shares are held in an SPV, and all dividends and corporate actions are processed internally. Kraken and Bybit’s xStocks on Solana go further by allowing transfers to self-custody wallets and integration with DeFi platforms like Raydium, but even here, rights remain with the custodian.

“You can’t vote, you’re not on the share register, and you don’t have a legal claim on the underlying stock.” – Sygnum Research

Gemini’s dShares follow the same pattern: ERC-20 tokens backed by custodian-held equities, dividends distributed in stablecoins, but no formal shareholder status.

The lack of legal ownership, Sygnum notes, is more than a technicality — it’s the reason institutional money isn’t touching these products. Fiduciary mandates require enforceable ownership, not just price exposure.

“A token in your wallet is not the same as a line in the share register.” – Sygnum Research

Liquidity’s Limits

Sygnum’s market data paints a mixed picture. Yes, the number of tokenholders is climbing, but daily trading volumes have flattened. Liquidity outside traditional market hours is often thin, leading to price dislocations that persist until primary markets reopen. Arbitrage opportunities are constrained because redemptions are only possible during underlying market hours.

The research also warns that retail investors may misunderstand what they’re buying. The Robinhood/OpenAI token controversy , where OpenAI itself publicly denied any link to the product, underscores how easily tokenised “exposure” can be mistaken for equity.

Key Challenges

• Ownership gap – No legal shareholder status or voting rights
• Liquidity – Thin off-hours trading, price dislocations
• Investor protections – No SIPC coverage, no statutory recourse
• Disclosure gaps – Retail misinterpretation of “ownership” risk

The Institutional Barrier

Sygnum is clear: until products integrate enforceable rights, institutional capital will stay away. The bank’s note argues that the most likely solution is a hybrid model, combining the public blockchain rails that crypto investors prize with the permissioned infrastructure that satisfies regulatory and fiduciary demands.

This could take the form of standards like ERC-1400, where token smart contracts link directly to custodian-held equities and pass through dividends, voting rights, and corporate actions to verified wallets in a legally enforceable way.

Such a system would still rely on custodians for underlying share registration, but from the investor’s perspective, it would feel like holding equity on-chain, with the protections and entitlements that mandates require.

“The multi-trillion-dollar opportunity lies in merging blockchain efficiency with legal enforceability.” – Sygnum Research

Not Hype: Just the First Act

Sygnum’s conclusion is neither cynical nor overhyped: tokenised stocks are an important first step toward modernising capital markets, but the current crop of offerings are retail-focused exposure products, not a regulatory breakthrough.

They are fast, flexible, and innovative, but they do not yet have the legal plumbing to support fiduciary capital. The bank’s research frames today’s market as a proof of concept, with the real transformation coming when shareholder rights, dividend flows, and corporate governance make the leap fully on-chain.

At that point, the “tokenised equities market” won’t just be a crypto niche; it will be the operating system of the global capital markets.