The $69 trillion US stock market is entering a new era as tokenised equities gain momentum. Castle Labs, a research and advisory firm, identifies this trend as crypto’s next major proving ground.
Tokenisation is moving beyond a niche experiment, evolving into institutional-grade infrastructure that allows investors to trade and leverage assets around the clock. Platforms like Ondo, xStocks, and Hyperliquid are leading this transformation, each offering unique methods to digitize stocks, ETFs, and derivatives.
Ondo, founded by former Wall Street professionals, represents the institutional side of tokenised markets. It uses an indirect tokenisation model where an offshore special-purpose vehicle buys and holds underlying shares.
Onchain tokens provide economic exposure without granting corporate voting rights. Investors gain access to equities while benefiting from structured financial products. Moreover, Ondo’s approach allows market participants to engage with tokenised Treasuries and equities efficiently, bypassing traditional brokerage limitations.
xStocks, initially developed by Backed Finance and later acquired by Kraken, focuses on multi-blockchain tokenised equities and ETFs. Its regulatory presence spans Jersey, Liechtenstein, and Switzerland.
xStocks issues tracker certificates backed one-for-one by the underlying securities held in segregated accounts. This system reinvests dividends through token distribution, creating a seamless onchain experience.
Additionally, its xChange swap engine connects decentralised exchanges with traditional market hours, channeling off-chain liquidity into digital pools. Consequently, retail and institutional investors can trade with greater flexibility and reduced intermediaries.
Hyperliquid introduces a different model by offering synthetic contracts rather than direct equity exposure. Builders can stake HYPE tokens to launch perpetual futures markets on almost any asset using price feeds. There are no shares, SPVs, or dividends; contracts settle in stablecoins.
This setup prioritizes speed and flexibility, allowing round-the-clock trading of commodities, tech giants, and pre-IPO opportunities. Significantly, tokenised oil recently saw over $1 billion in weekend trading during geopolitical uncertainty, highlighting the demand for continuous liquidity unavailable in traditional markets.
(adsbygoogle = window.adsbygoogle || []).push({});Castle Labs emphasizes that tokenisation extends beyond speculation. It promotes self-agency, choice, and financial innovation. Investors now access 24/7 trading, leverage positions, and earn yield in DeFi vaults.
Furthermore, major players like BlackRock signal growing institutional interest, envisioning a financial system running on a unified blockchain. As the technology matures, tokenised equities may redefine accessibility, efficiency, and global market participation.
Related: SEC Says Tokenization Does Not Change Securities Status
