Tokenized Stocks Are Being Driven by Legacy Finance, Not Crypto

The biggest names in traditional finance, not crypto-native startups, are building the infrastructure behind tokenized stocks. BlackRock, JPMorgan, Franklin Templeton, and Goldman Sachs have launched tokenized products on public blockchains, positioning legacy Wall Street as the driving force behind one of crypto’s most anticipated use cases.

Tokenized stocks are blockchain-based representations of traditional equity or fund instruments, issued and settled on-chain but backed by real assets held by regulated custodians. Unlike synthetic tokens or DeFi derivatives, these are compliant products operating under existing securities law.

Wall Street Is Building the Tokenized Stock Infrastructure

BlackRock’s BUIDL fund, a tokenized U.S. Treasury product built on Ethereum, surpassed $500 million in assets under management within weeks of its March 2024 launch. It remains the largest on-chain fund of its kind.

Franklin Templeton has been in the space even longer. Its BENJI token, an on-chain money market fund live on Polygon and Stellar since 2021, gave the 75-year-old asset manager a multi-year head start in tokenized securities.

JPMorgan’s Onyx platform has processed billions in tokenized repo transactions for institutional clients. Goldman Sachs followed with its Digital Asset Platform (GS DAP) for tokenized bonds.

On the infrastructure side, the SEC recently approved Nasdaq’s move to allow tokenized securities trading, while the New York Stock Exchange is developing its own tokenized securities platform. These are not pilot programs buried in innovation labs. They are production-grade systems from the institutions that already clear and settle most of the world’s equity volume.

Ondo Finance has emerged as a bridge between the two worlds, wrapping BlackRock and PIMCO funds as on-chain tokens (OUSG, USDY) that crypto-native investors can access. The trend mirrors a broader wave of institutional upgrades across digital asset infrastructure that has accelerated in recent months.

Why Crypto-Native Attempts at Stock Tokenization Failed First

Legacy finance’s dominance in tokenized stocks is partly a story of crypto-native failures clearing the path.

Mirror Protocol on Terra offered synthetic tokenized stocks with no regulatory framework and no real asset backing. When UST and LUNA collapsed in May 2022, Mirror went with them. Synthetix discontinued its synthetic equities products (sSPY, sAAPL) the same year under SEC regulatory pressure.

FTX’s tokenized stocks program, which offered U.S. equities to non-U.S. users, collapsed alongside the exchange in 2022. All three projects shared the same vulnerability: they lacked the licenses, custody infrastructure, and regulatory relationships that traditional finance takes for granted.

BlackRock, Franklin Templeton, and JPMorgan hold existing broker-dealer and investment adviser registrations. They maintain custodial relationships that institutional clients, from pension funds to sovereign wealth funds, require before allocating capital. Crypto-native firms cannot replicate those relationships without years of regulatory work.

The irony is hard to miss. The industry blockchain was designed to disintermediate is now the one most effectively deploying it. That said, this reflects the current regulatory moment more than a permanent outcome. As tokenization continues to reshape business models in 2026, the regulatory landscape could shift in ways that reopen the door for newer entrants.

The recent wave of liquidations across crypto markets is a reminder that volatility remains a defining feature of the space, one that regulated tokenized products are specifically designed to mitigate for institutional allocators.

What Tokenized Stocks Could Mean for 24/7 Crypto Markets

For crypto market participants, the implications go beyond Wall Street adopting blockchain as a back-end upgrade.

Traditional stock markets operate roughly 6.5 hours per day, five days per week. Tokenized stocks on blockchain rails could enable 24/7 settlement, aligning equity trading with the always-on crypto market structure that traders already operate in.

Fractional ownership via tokenization could lower minimums for high-priced equities. Berkshire Hathaway Class A shares, for instance, trade above $600,000 per share, a barrier that tokenization could eliminate entirely.

The more crypto-native implication is composability. Ondo Finance’s tokenized Treasuries are already being used as collateral in DeFi protocols, meaning TradFi-issued tokens are entering crypto’s permissionless lending and borrowing ecosystem. A tokenized stock that can serve as collateral in Aave or Maker would blur the line between Wall Street and DeFi in ways neither side has fully priced in.

Boston Consulting Group has projected the tokenized asset market could reach $16 trillion by 2030. With interest rate policy still in flux, as Fed officials continue to signal multiple rate cuts ahead, the macro backdrop for yield-bearing tokenized products looks increasingly favorable.

The SEC’s approval of Nasdaq’s tokenized securities framework and the NYSE’s platform development mark concrete regulatory milestones, not speculative promises. For crypto investors watching from the sidelines, the signal is clear: tokenized stocks are arriving through the front door of regulated finance, not the back door of DeFi workarounds.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.