Tokenization of US Stocks: A Stress Test for Web3 Finance

Recently, the tokenization of US stocks has become a focal topic in the cryptocurrency market. This is not just a hot phenomenon, but also an important test for the on-chain financial system.

A certain trading platform has launched stock tokenization services in Europe, while xStocks has also landed on multiple mainstream trading platforms. Several decentralized exchanges have begun to list stock tokens of well-known companies such as Apple and Tesla. This series of actions has quickly attracted widespread attention from the market.

However, focusing solely on the hype without understanding the structural changes behind it may lead investors to a passive state. In fact, the tokenization of stocks represents a crucial test of whether on-chain finance can support mainstream financial assets.

Structural Stress Testing of On-Chain Finance

Looking back at history, we can see that industry narratives develop in cycles. As early as 2019, some trading platforms attempted tokenization of US stocks, but ultimately ceased due to regulatory reasons. Additionally, attempts to simulate US stock prices using synthetic assets also failed with the collapse of related projects.

The current stock tokenization is no longer a grassroots experiment, but a compliant attempt led by licensed institutions. This is a key turning point.

Taking a certain trading platform as an example, its stock tokenization service launched in Europe adopts a "broker proprietary + on-chain issuance" closed-loop model. The platform is licensed in the EU, purchases actual stocks, and issues tokens that are 1:1 mapped on the blockchain. From asset custody, issuance to clearing and settlement, and user interaction, the entire process has been streamlined.

These tokens are initially deployed on a certain second-layer network to ensure controllable transaction speed and costs. In the future, they may migrate to a blockchain built by the platform itself, achieving complete control over the infrastructure.

Although voting rights cannot be opened at this time to avoid related regulations, the overall structure has already begun to take shape: it resembles the construction of an "on-chain securities trading system" that can almost operate independently.

For the cryptocurrency industry, this is the first time that traditional internet brokers not only have autonomy on the issuance side but also have deconstructed the on-chain structure of the assets.

From Experiment to Compliance: Resonance of Multiple Factors

The rise of this round of stock tokenization craze is not coincidental, but rather the result of multiple core factors resonating at the same time.

Firstly, the regulatory environment has become more relaxed, and the regulatory direction is clearer. The MiCA legislation in Europe has officially taken effect, and US regulatory agencies have also begun to release some positive signals.

A certain trading platform is able to quickly launch stock token services in the EU, thanks to the securities license it obtained in Lithuania. xStocks can be accessed by multiple trading platforms simultaneously, which is also attributed to its compliance structure established in Switzerland and Jersey.

At the same time, on-chain funds are also looking for new investment outlets, and the structure of on-site funds is undergoing changes. The gap between traditional financial markets and the crypto market is narrowing.

Currently, there are a large number of projects on-chain that lack fundamentals but have high market capitalizations. Stable funds are beginning to seek asset allocation exits that are "anchored and logical." In this context, stock tokens launched by compliant institutions naturally have appeal. They are both familiar and stable, and can be combined with stablecoins and decentralized finance.

The integration of traditional finance and the cryptocurrency industry is deepening. From large asset management companies to investment banks, from Swiss banks to the Monetary Authority of Singapore, traditional financial giants have begun to actively engage in the application of blockchain technology and infrastructure development. As the most mainstream and recognizable asset, stocks naturally become the preferred choice for tokenization.

Traditional Assets on the Blockchain: Opportunities and Challenges Coexist

Looking to the future, stock tokenization may not exhibit explosive growth, but it is expected to become a resilient infrastructure evolution path in the Web3 world.

The significance of this trend lies in promoting two important structural changes: first, the boundaries of assets are beginning to migrate onto the chain, and second, the traditional financial system is willing to adopt on-chain methods to organize some transaction and custody processes. Once these two changes take shape, it will be difficult to reverse.

So, is it a benefit or a drawback for stocks to enter the crypto market to compete for liquidity?

This is a double-edged sword. It introduces higher quality assets, but it may also change the flow of funds on the chain.

From a positive perspective:

1. Traditional finance's "blue-chip assets" have entered the market, providing a new destination for on-chain funds and increasing the allocation options for "stable assets." In a market where narratives shift rapidly and funds flow long-term, these clearly structured and realistically supported assets help liquidity find its allocation direction again.

2. This will create the "catfish effect." The emergence of tokenization of strong narrative assets in the US stock market will raise the benchmark for all on-chain assets, driving overall quality improvement of Web3 projects.

3. Crypto users can purchase stocks natively, reducing the diversion of liquidity from the US stock market to the crypto market.

But on the other hand:

1. This will also put pressure on native crypto projects. Not only will the narrative be seized, but the on-chain funding structure and user preferences may also be reshaped. Especially when the liquidity of tokenized stocks increases and begins to venture into perpetual contracts, lending, and portfolio configurations, it will directly compete with native assets for stablecoin flow, mainstream users, and on-chain attention.

2. For project parties, financing may become more difficult. When well-known technology company stock tokens appear in the on-chain asset pool, and may even include some star private equity, investors and users' judgment criteria for "what is worth investing in" and "what has pricing basis" may change.

Stock tokenization prompts us to reconsider: Can Web3 truly support mainstream assets and real trading behaviors? Can we rebuild a securities system with less friction and greater transparency than traditional markets through an open financial structure? The answers to these questions will gradually emerge in future developments.