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A recent CoinGecko report on the State of Real World Asset (RWA) tokenization found that, despite growing by nearly 300% since 2024, tokenized stocks continue to remain a niche market, with a market capitalization of just $11.4 million as of April 2025.
Key players in the cryptocurrency industry, such as Coinbase and Kraken, are trying to grow their influence in the space by planning to offer tokenized US-listed stock trading to global investors, while Coinbase intends to tokenize its own $COIN shares.
Key Takeaways
- Tokenized stocks are classified as securities, which makes them subject to stringent regulatory requirements.
- Tokenized stocks are a by-product of misaligned market demographics where traditional equity investors tend to stick with Web2 platforms and are wary of crypto, while crypto-native users seek high-yield and liquid assets – traits that tokenized equities don’t currently offer.
- Despite technical innovation, tokenized stocks have yet to prove that they meet a real market demand.
- Experts argue that the current offerings fall short in delivering genuine ownership, ease of access, or clear utility compared to traditional brokers.
- While current adoption is limited, the long-term future for tokenized stocks could be significant, potentially reaching $1 billion in market cap by the end of 2025.
Tokenized Equities Reach $11.4M in Market Cap
According to the State of RWA report published by CoinGecko in June 2025, the market capitalization of tokenized stocks surged to $11.4 million as of April 2025.
Despite the nearly 300% yearly growth, which, according to the report, has been primarily led by Backed Finance, a protocol focusing on the tokenization of equities, the asset class’s market cap remains on the lower side.
In comparison, the market capitalization for tokenized treasuries grew by 544% since the start of 2024, gaining $4.7 billion and reaching a new all-time high of $5.6 billion.
According to CoinGecko, this has been the best-performing RWA asset class over the past year and was highly driven in March 2025, as the US announced significant trade tariffs.
Kevin de Patoul, co-founder and CEO of Keyrock, one of the biggest crypto investment firms, said that one of the main reasons why tokenized stocks remain a niche comes down to regulation, access, and utility.
Unlike stablecoins, for example, which have performed well in the market because they are not considered financial instruments in most jurisdictions, tokenized treasuries and equities are considered financial instruments, thus falling victim to more regulation.
Kevin de Patoul told Techopedia:
“Right now, tokenized stocks havenʼt yet demonstrated a clear advantage over traditional equities. Liquidity follows utility. Tokenization needs to solve a real-world problem to become meaningful.
“The first area they can add value is access. If buying a tokenized stock through Coinbase or another crypto-native platform is easier than going through a traditional broker, especially in parts of the world where access to US equities is limited – thatʼs a win.”
Dr. Max Bernt, the managing director and global head of regulatory affairs at Taxbit Europe, added that the niche that tokenized stocks face could be due to user mismatch, where traditional equities investors tend to lean toward using Web2 brokers, while crypto-native investors tend to favor high-yield, high-liquidity assets.
Brent told Techopedia:
“Although technically novel, tokenized stocks are nevertheless complicated and subject to regulatory restrictions, placing them in an awkward middle ground.”
Product-Market Fit: Is This a Question of Demand?
The small market capitalization of tokenized stocks, amid all of its reasons, raises another critical question: What does this suggest about product-market fit? In essence, are tokenized assets truly meeting a demand or solving a problem for a significant user base?
According to Taxbit’s Dr. Bernt, the small market cap suggests that the product is yet to connect with its intended market.
Dr. Bernt added that institutions confront legal ambiguity and unclear returns, and retail adoption is constrained by friction in onboarding, custody, and user experience.
This highlights a dual challenge: a lack of clarity for large-scale investors and significant usability hurdles for individual users.
Lloyd Wahed, CEO of MemberCap, echoed a similar sentiment, noting that the market cap is less a reflection of potential and more a signal that the current product does not meet institutional expectations.
He argued that for true scalability, tokenized stocks “need to offer more than synthetic price exposure – they’ll need to represent genuine ownership, regulatory certainty, and operational advantages.”
According to Keyrock’s de Patoul, tokenized stocks were quite big in 2021, before being hit with regulatory hurdles and “more or less shut down for four years.”
However, he also added that as the regulatory environment matures and technical barriers are addressed, the asset class is expected to see “exponential growth.”
Recent developments are also suggesting a renewed institutional interest and a more cautious, compliant approach.
At the end of May 2025, Kraken announced in a blog post that the company would “[take] Wall Street onchain with tokenized equities” through a strategic partnership with Backed.
Similarly, Coinbase is also planning to jump into the tokenized equities market, having disclosed that the company is waiting for the United States Securities and Exchange Commission (SEC) to green light their trading.
Exciting? Yes. Important? Absolutely. But breaking news? Not exactly. We’ve been saying since earlier this year that @SECGov should enable markets to unlock tokenized securities. Tokenized debt, equity, and investment funds present an opportunity for tailored regulation for…
— paulgrewal.eth (@iampaulgrewal) June 17, 2025
With tokenized equities being labelled as securities, navigating the regulatory landscape is one of the top priorities when it comes to their further adoption.
Keyrock’s de Patoul said:
“The biggest obstacles are the strict securities laws in major markets like the US and EU, which treat tokenized stocks the same as traditional equities, thereby requiring full registration, disclosures, KYC/AML compliance, and regulated trading venues. This creates a heavy burden for any platform wanting to list tokenized equities and makes it nearly impossible to offer a truly global, permissionless product.”
Taxbit Europe’s Dr. Bernt added that this securities classification triggers extensive compliance requirements across AML/KYC, disclosures, and financial reporting.
Moreover, the fragmented global legal landscape makes cross-border offerings an even bigger challenge.
A solution to this, however, would be a wider “legal wrapper” that could make tokenized equities more compliant and accessible.
The founder of tokenized RWA platform RAAC, Kevin Rusher, told Techopedia that the industry is already seeing such frameworks put in place in jurisdictions such as Switzerland, Singapore, and parts of the European Union; however, such structures continue to serve institutional players more than retail users.
The Future of Tokenized Stocks
As tokenized stocks continue to work through the complexities of regulatory hurdles, could they evolve into a distinct and robust asset class in their own right?
Keyrock’s de Patoul highlighted that analysts are projecting a trillion-dollar market for tokenized equities in the coming years, driven by institutional demand and improved infrastructure.
He said:
“Our own outlook for tokenized stocks for 2025, as shared in our latest report, is $500 million in a base case. A bull case of $1 billion is possible if Trump-era regulations evolve to permit the tokenization and trading of stocks without strict KYC requirements as anticipated, leading to an exponential market expansion driven by global retail participation and institutional adoption.”
Taxbit’s Dr. Bernt noted that as of this moment, tokenized assets mostly serve as a bridge to help traditional finance (TradFi) users become familiar with decentralized finance (DeFi).
However, in the long term, tokenized stocks could become “a native asset class of their own, offering the speed, accessibility, and transparency that legacy systems struggle to deliver.
“Success will, however, heavily depend on regulatory clarity, institutional-grade infrastructure, and – first and foremost – compelling user experience and benefits.”
Other experts noted that for tokenized stocks to truly flourish, they would need to evolve “beyond replication.”
Jon Trask, the CEO and founder of Dimitra, told Techopedia:
“At present, most tokenized stocks simply mirror what already exists in the traditional financial ecosystem. The real opportunity lies in reimagining how ownership models, participation, and access can work in capital markets to make them easy to understand and access.”
The Bottom Line
Tokenized equities represent a promising innovation at the intersection of traditional finance and blockchain technology. While the market has grown considerably year-over-year, its total market capitalization remains a niche within the asset tokenization industry.
A possible side effect of unresolved challenges around regulation, usability, and market fit. Regulatory burdens, particularly in major markets like the US and EU, are major roadblocks, and the current offerings fail to appeal to both institutional investors and crypto-native users alike.
Rising interest in the asset class from exchanges like Kraken and Coinbase could signal that momentum is slowly building and bringing more attention to tokenized stocks. Emerging legal frameworks in countries such as Switzerland and Singapore could also be a driving force toward this change.
FAQs
Why is the adoption of tokenized stocks still limited?
How are exchanges like Coinbase and Kraken supporting tokenized assets?
Are tokenized stocks a viable future asset class?
What are the disadvantages of tokenization?
References
- RWA Report 2025: When Crypto Gets Real (Coingecko)
- Coming soon: Kraken takes Wall Street onchain with tokenized equities (Blog.Kraken)
