The U.S. Is Building Tokenized Stock Infrastructure. The Rules Need to Catch Up

Robinhood CEO Vlad Tenev’s call for the U.S. to establish a regulatory path for tokenized stocks comes at a revealing moment for American capital markets.

The question is no longer whether financial institutions are interested in putting securities onchain. They are already building the infrastructure to do it.

In March, Nasdaq announced its plans for an equity token design aimed at preserving issuer control, existing regulatory frameworks and the rights associated with company shares. Nasdaq said the model could also modernize corporate actions, proxy voting and shareholder engagement.

Then, in July, the Depository Trust & Clearing Corporation (DTCC) announced that it had successfully processed production transactions using securities tokenized through the Depository Trust Company. The transactions included equity delivery-versus-payment, equity delivery-versus-delivery and equity token transfers, with more than 30 firms participating. DTCC plans to launch its tokenization service in October.

The significance is not simply that one of Wall Street's largest market infrastructures is experimenting with blockchain. DTCC's model is designed to bring tokenized representations of securities into the existing market structure, rather than create a parallel system.

The infrastructure is therefore moving ahead. The regulatory question is becoming more specific: What should a tokenized share legally represent, and how should it fit into the existing U.S. securities market?

The Market Is Already Testing the Alternative

At the same time, companies outside traditional market infrastructure are moving quickly.

Robinhood launched stock tokens in Europe, giving eligible customers access to tokenized versions of U.S. equities. Tenev has now argued that the U.S. should provide a path for similar products domestically, pointing to potential benefits including 24/7 trading and real-time settlement as reported by Coindesk.

The distinction between those products and exchange-traded shares is important, however.

A token that provides exposure to Apple or Nvidia is not necessarily the same thing as an onchain representation of an Apple or Nvidia share. The difference determines who owns the underlying asset, who has voting rights, how corporate actions are handled and what happens if the intermediary providing the token fails.

That distinction is not theoretical. The SEC's own January guidance on tokenized securities recognizes different models, including securities tokenized by their issuers and securities tokenized by unaffiliated third parties, with different structures and rights for holders.

That is precisely why the U.S. needs a clear framework.

U.S. Firms Are Already Showing What Tokenized Securities Could Look Like

There is also evidence that the market does not need to choose between tokenization and traditional investor protections.

In July, Ondo Finance launched tokenized versions of BlackRock's iShares Core S&P 500 ETF and Micron shares through a custodial structure. The company said the securities remained within the existing U.S. regulatory and infrastructure framework, while a partnership with Broadridge was designed to give token holders access to proxy voting and regulatory disclosures.

Later that month, Ondo said its broker-dealer subsidiary, Oasis Pro Markets, had received FINRA authorizations covering tokenized equities and funds for U.S. investors under SEC and FINRA oversight.

Securitize has taken another step by putting its own public shares onchain. When the company began trading on the New York Stock Exchange in July, it also made issuer-sponsored tokenized SECZ shares available to eligible U.S. investors through its regulated platform.

These developments demonstrate that tokenization does not necessarily require a parallel financial system.

It can be built into the existing one.

The Regulatory Challenge Is About Rights, Not Blockchain

This is where the U.S. should be careful.

The industry has a legitimate argument that tokenized securities should not be forced into rules designed around decades-old settlement infrastructure simply because regulators are unfamiliar with the technology.

But regulators also have a legitimate reason to insist that technological innovation does not dilute investor rights.

A tokenized stock should therefore answer basic questions before it is allowed into the mainstream market.

Does the holder own the security or merely receive economic exposure to it?

Does the holder retain voting and other shareholder rights?

Can the token be transferred without breaking the chain of custody or regulatory controls?

How are dividends, stock splits and other corporate actions processed?

Can the token interact with existing exchanges, custodians and clearing infrastructure?

And perhaps most importantly:

What happens to the investor's claim if the company providing the tokenized product becomes insolvent?

These are not crypto-specific questions. They are securities-market questions.

That is why the strongest U.S. approach may be to regulate tokenized securities according to the rights and obligations they represent, rather than treating blockchain itself as the regulatory dividing line.

The Real Risk Is Fragmentation

There is another reason the U.S. needs to move carefully.

If tokenized securities develop through separate platforms, jurisdictions and legal structures, the result could be a fragmented market in which the same underlying U.S. equity exists in several economically similar but legally different forms.

That would undermine one of tokenization's central promises: interoperability.

DTCC's approach is instructive. Its service is being developed to support tokenized representations of DTC-custodied assets across multiple blockchain networks, with the initial production transactions already spanning different networks.

Nasdaq's model similarly attempts to make tokenized securities compatible with conventional market infrastructure rather than creating a completely separate market. Tokenized shares can trade on the same order book as their traditional counterparts when they meet the required conditions.

Those efforts point toward a more credible version of tokenization: not Wall Street versus crypto, but blockchain becoming another layer of Wall Street's infrastructure.

The U.S. Does Not Need a “Crypto Stock Market”

Tenev is right about one thing: the U.S. needs a clearer path for tokenized equities.

But the objective should not be to create a special “crypto stock market.”

The more useful goal is to establish the conditions under which a tokenized security can function as a security — with clearly defined ownership, shareholder rights, custody, settlement and investor protections — regardless of the technology used to record or transfer it.

The U.S. already has much of the institutional infrastructure needed to make that possible. Nasdaq has developed a framework for tokenized securities; DTCC has moved from testing into production transactions and is preparing a tokenization service launch; and firms such as Ondo and Securitize are testing different models within the existing regulatory perimeter.

The next step is therefore not to decide whether tokenization is coming.

It is to decide what kind of tokenized market the U.S. wants to build.

If regulators get that distinction right, blockchain does not have to replace America's capital markets. It could become part of the infrastructure that makes them faster, more interoperable and eventually more accessible — while preserving the legal rights that made those markets trusted in the first place.