Tokenized Stocks Market Hits $1.2B as Regulators Warn of Investor Confusion

​The market for tokenized equities has reached a new milestone, with total capitalization climbing to a record $1.2 billion, according to data from Token Terminal. Growth accelerated notably in September and December, signaling rising interest in tokenized stocks as an emerging asset class beyond Bitcoin and stablecoins.

Despite the momentum, regulators have raised concerns about potential risks. The European Securities and Markets Authority (ESMA) cautioned that tokenized stocks could lead to investor misunderstanding, as many products mirror share prices without providing actual shareholder rights. ESMA executive director Natasha Cazenave said there is a “risk of misunderstanding” around ownership, adding that most tokenized equity projects remain relatively small and illiquid.

Market observers have drawn parallels between tokenized stocks today and the early days of stablecoins and decentralized finance. Token Terminal noted that “tokenized stocks today are like stablecoins in 2020,” highlighting how early-stage the sector remains. Stablecoins, once limited in scale, have since grown into a market valued at around $300 billion.

Recent activity has been driven by new product launches and expansion plans. In September, Backed Finance introduced its xStocks suite on Ethereum, offering around 60 tokenized equities through partnerships with major crypto platforms. Momentum continued in December as Securitize announced plans for compliant onchain equity trading aimed at enabling direct share ownership.

Several firms are preparing to expand tokenized stock offerings. Ondo Finance plans to roll out tokenized U.S. stocks and exchange-traded funds on Solana in early 2026. Coinbase has also announced plans to add stock trading as part of its broader strategy to become an “everything exchange.”

Institutional interest is beginning to surface as well. Nasdaq disclosed that it has filed with the U.S. Securities and Exchange Commission to offer tokenized stocks, describing tokenization as a key strategic priority. As adoption grows, regulators and market participants alike are closely watching how the sector develops and whether clearer standards emerge.