Digital Stock Tokens: The Integration of TradFi and the Encryption World

In the investment market of 2025, a new trend is emerging. Investors can trade stocks anytime and anywhere, even using stocks as collateral to borrow stablecoins or purchasing partial equity in private companies. These operations, which once seemed impossible, are now becoming a reality.

Digital stock tokens blur the lines between cryptocurrency and traditional investments. Numerous cryptocurrency exchanges and TradFi platforms are actively laying out plans in this emerging field.

The Essence of Digital Stock Tokens

Digital stock tokens are digital representations of real company shares on a blockchain network. Each token typically represents one share or a fraction of a share of the company, fully backed by actual custodied stocks.

When investors purchase digital stock Tokens, licensed custodians hold the corresponding physical stocks as reserves, while investors receive a blockchain Token whose price changes are synchronized with the actual stocks. These Tokens can be traded on cryptocurrency exchanges, integrated with decentralized finance ( DeFi ) protocols, and transferred between different wallets, which are functionalities that traditional brokerage accounts do not possess.

Market Leader

In 2025, the digital stock Token market is experiencing explosive growth, with cryptocurrency exchanges and traditional brokers entering the fray.

Multiple encryption exchanges launched over 60 types of U.S. stock Tokens in June 2025, including blue-chip stocks like Apple, Tesla, and Nvidia, as well as the S&P 500 ETF. These Tokens are issued on the Solana blockchain.

A certain TradFi platform launched over 200 digital stock Tokens for its European clients, including shares of some private companies. These Tokens are based on the Arbitrum blockchain, and the announcement of their release has led to the platform's stock price reaching an all-time high.

Another well-known trading platform plans to launch ERC-20 based digital stock Tokens on Ethereum, aiming to achieve a true 24/7 market by the end of the year.

Causes of Outbreak

The maturity of infrastructure is a key factor, and blockchain technology has finally ushered in a golden era of financial applications.

High-performance blockchain networks provide an ideal infrastructure for financial innovation with extremely fast transaction speeds and very low fees. More importantly, a number of compliant licensed institutions are injecting professionalism and credibility into this emerging market.

The strong demand from investors for an all-weather trading experience has also driven this transformation. The freedom to invest without time and space constraints has allowed a certain digital stock platform to achieve a trading volume of 300 million USD in just one month, confirming the robust demand in the market for on-chain stock trading.

Data shows that the digital stock token market experienced explosive growth in July, with a total market capitalization reaching $370 million. Excluding a large issuance, the market capitalization of the remaining tokens increased from $16.7 million in June to $53.6 million, with a monthly growth rate of up to 220%.

The number of blockchain addresses holding digital stock Tokens surged to over 90,000 in July, up from just 1,600 in June. This growth rate is reminiscent of the early DeFi boom from 2020 to 2021.

Advantages of Digital Stock Tokens

Compared to traditional stock trading, digital stock tokens have the following advantages:

1. Longer trading hours: Offers 24/5 trading, covering multiple time zones.
2. Instant Settlement: Blockchain transactions can be settled in seconds without intermediaries.
3. Fractional ownership: Achieve seamless fractional ownership through the divisibility of the blockchain.
4. Lower fees: Through the efficiency of the blockchain, users may only need to pay a small amount of network fees.

Digital stock Tokens have also brought new ways of investing:

1. DeFi Integration: Stock Tokens can be used as collateral for DeFi lending.
2. 24/7 Trading: Allows for instant position management across global time zones.
3. Portfolio Diversification: You can hold cryptocurrencies and digital stock tokens on the same platform.

Potential Risks

Despite the promising market outlook, digital stock tokens also face some controversies and risks:

1. Doubts about "non-real stocks": Some believe that these tokens are essentially "Contracts for Difference" in the encryption era (CFD). Token holders rely entirely on the commitments of the issuer and custodial arrangements.
2. Liquidity risk: During non-trading hours, liquidity may be insufficient, which may lead to inflated prices or widened spreads.

Regulatory Differences

Europe is leading this revolution due to a more inclusive regulatory framework. The EU has no qualified investor restrictions, and the regulatory clarity in places like Switzerland makes it an ideal choice for issuers.

Multiple trading platforms have restricted digital stock token services to non-U.S. users. The U.S. market remains cautious about retail digital stock token trading, as regulators may view these tokens as securities that require registration or are limited to accredited investors.

Market Outlook

Despite being in its early stages, the adoption of digital stock tokens has shown optimistic signs. Research institutions predict that if only 1% of the global stock market is tokenized, the market value of digital stock tokens could exceed $1.3 trillion.

According to predictions, the tokenization of physical assets ( RWA ) will grow from $600 billion in 2025 to $18.9 trillion by 2033. Even if global stock trading occupies only a small portion of this, it can bring significant trading volume to digital stock token platforms.

Leading Blockchain Ecosystem

Solana has become the preferred blockchain for digital stock tokens due to its high throughput and low transaction costs. Several platforms have chosen Solana. Ethereum also maintains an important position through Layer-2 solutions and its vast ecosystem.

Overall, digital stock tokens are opening Pandora's box, and the boundary between TradFi and the encryption world will become increasingly blurred. Now the only suspense is: how long will traditional financial institutions take to adapt to this 24/7 trading new era?