Major crypto platforms are now targeting the $62 trillion stock market. Their goal, they say, is to let investors trade “tokenized” stocks globally at any hour, without the limits of traditional market schedules.
The push could lead to one of the most significant regulatory debates in decades, potentially rewriting U.S. trading regulations and opening the door for crypto firms to compete directly with Wall Street’s largest players.
Driving much of the momentum is President Donald Trump. His administration has shown strong support for digital assets, putting crypto-friendly leaders in key regulatory roles, boosting token prices, and giving the industry renewed confidence about its prospects in the U.S.
Legacy finance players, which once dismissed crypto as a passing trend, are now pushing back. They’re urging the Securities and Exchange Commission (SEC) to ensure that new players meet the same standards as traditional firms, including registration requirements and investor protections. Some, however, are exploring ways to integrate crypto into their offerings.
If traditional finance (TradFi) wins the argument, tokenized stocks will be regulated exactly like regular shares, making them indistinguishable in practice. Crypto advocates, however, want more flexible rules tailored to blockchain-based trading. Critics warn that separate systems for tokenized and traditional shares could split liquidity and lead to more volatile markets.
Tokenization has been a long-standing goal for crypto enthusiasts. Supporters argue that blockchain technology will eventually replace outdated market infrastructure, making trading faster, cheaper, and more accessible.
Crypto exchange firm Coinbase is currently seeking the SEC’s approval to offer tokenized stock in the U.S., while Kraken and Robinhood are exploring offerings in overseas markets, given the uncertain U.S. regulatory climate.
The viability of tokenized stocks is generating buzz in the crypto world, especially after Trump signed the GENIUS Act last month, creating a regulatory framework for stablecoins. Traditional trading firms argue that tokenized and traditional shares are essentially the same and should follow identical rules to ensure a fair marketplace.
The SEC has not yet taken a stance, though Paul Atkins, its chair, has indicated possible rule changes to keep the U.S. competitive in this space.
Nonetheless, history suggests that Wall Street is quick to adapt and could end up acquiring or outpacing some of its crypto challengers. Major firms like BlackRock are already experimenting with tokenization, and the lines between “old” and “new” finance may blur faster than expected.
Still, it remains uncertain whether the average investor will embrace blockchain-based shares. Despite its growing influence, crypto adoption in the U.S. remains relatively small, with just 8% of Americans using it in 2024, down from 10% in 2022.
This situation is still very much in flux, and crypto industry players like Riot Platforms Inc. (NASDAQ: RIOT) will be keeping a finger on the pulse to glean how these developments could impact the trajectory of the industry.
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