Tokenization is trending, not only on X. Kraken and Robinhood already allow their users to trade tokenized stocks. Bitwise’s Matt Hougan estimates the value of assets that can be tokenized at $257 trillion, a massive market not yet represented in innovative marketplaces. Regulators are reacting to the trend: U.S. Securities and Exchange Commission Chairman Paul Atkins encourages the emergence of tokenized stocks, while his colleague Hester Peirce warns about “unique risks.”
What does Hester Peirce say?
On July 9, 2025, as the tokenization of stocks became a topic of discussion, SEC Crypto Task Force head Hester Peirce issued a statement on the SEC website. Her message, titled “Enchanting but not Magical,” was summarized by the media as: “tokenized securities are still securities.”
In her message, Peirce emphasized that tokenized securities qualify for existing securities laws. Blockchain does not transform securities into cryptocurrency or any other asset class. Therefore, securities laws apply to tokenized assets, and investors and issuers must recognize this to avoid risks.
Regarding “unique risks,” Peirce noted that some securities are tokenized by entities that didn’t issue them, or they tokenize security entitlements. Traders should be aware of such possibilities as they introduce counterparty risks, while distributors of tokenized securities must remember their disclosure obligations.
“While blockchain-based tokenization is new, the process of issuing an instrument representing a security is not. The same legal requirements apply to on- and off-chain versions of these instruments.”
At the end of her statement, Peirce calls on market participants to meet with SEC representatives to work together on creating a clear legal framework for tokenized securities trading.
The Biden-era SEC Chair, Gary Gensler, was known for considering most cryptocurrencies unlicensed securities, leading to multiple legal battles. Hester Peirce’s statement is markedly different. She reminds the public that the format of securities doesn’t change their legal essence. Gensler claimed altcoins are securities; Peirce says securities are securities.
Does Peirce’s statement represent the SEC’s position?
While Peirce’s comments are cautionary, SEC Chair Paul Atkins has made favorable statements about tokenized stocks. As reported by multiple media outlets, Atkins referred to tokenized securities as “innovation” and stated that the SEC should advance innovation in the marketplace.
He did say that, but Atkins is not suggesting current trading practices can remain unchanged. In the same interview, he noted that tokenized securities are not a new product type, but considers them beneficial for the market and seeks to adjust the rules accordingly.
Overall, Atkins and Peirce are aligned, so Peirce’s statement fully matches the SEC chair’s vision.
What are the problems in the RWA markets?
Raising awareness among traders, market supervision, and rule adjustments are vital as there have been recent incidents in which companies denied involvement with tokenized securities traded or announced by marketplaces.
One such instance is OpenAI’s recent dismissal of Robinhood CEO Vlad Tenev’s public statement that tokenized OpenAI shares would soon be tradable on Robinhood. Tenev later admitted that “stock tokens” traded on Robinhood do not qualify as OpenAI equity.
What’s the future of tokenized stocks?
Robinhood’s Vlad Tenev has called for the tokenization of shares, believing it will empower retail investors to trade securities and benefit institutional traders as well. In a Bloomberg interview, he mentioned that the SEC is working with businesses, including Robinhood, to adjust rules for tokenized stocks.
In a recent memo, Bitwise CIO Matt Hougan outlined the prospects for the tokenized stock market. He estimates the total value of the global stock and bond markets at $257 trillion and predicts that Layer 1 blockchains and marketplaces will compete for pieces of this emerging market. Hougan cites BlackRock CEO Larry Fink, who said: “Every stock, every bond, every fund, every asset, can be tokenized.”
Compared to the $257 trillion tokenized stock market, the estimated $2 trillion stablecoin market expected by 2030 is barely visible. Hougan believes tokenization can develop quickly, and says modern-day stock token investors are “very early.”
“I still think it will take more than a decade before the majority of stock and bond trading happens on-chain. But with major financial firms like Robinhood and Tradeweb positioning themselves for the transition today, I’ve started to wonder: Could tokenization achieve 1-5% penetration in a few years? Could a dozen major pilot projects lift us to that level of market penetration? It seems possible, and it would translate into trillions of dollars … more than any other crypto application or asset, including Bitcoin.”
Leave a Comment