What are tokenized securities?
Tokenised securities are digital tokens on blockchain networks that stand for ownership claims over real-world financial assets — stocks, bonds, funds, or commodities — held by a regulated custodian.
They emerge from tokenisation, the process that turns ownership rights to an asset into a token recorded on a distributed ledger technology (DLT) infrastructure. These tokens differ from typical cryptocurrencies: they’re regulated investment products, each backed by tangible underlying securities.
Popular examples of tokenised securities
Several real-world assets and platforms now use this technology.
- Ondo Finance leads the pack, offering tokenised versions of U.S. Treasuries, stocks, ETFs, and commodities.
- On-chain equity trading also lets investors gain exposure to major companies. SpaceX, for instance, appears in the sources as a notable example.
- Real estate and fine art benefit from tokenisation as well, since it helps turn these traditionally illiquid assets into more tradable forms through fractionalization.
- Investment funds follow a similar path: capital from multiple investors gets tokenised, with each token reflecting a defined share in the fund.
How to buy tokenised securities
Buying tokenised securities usually follows a clear sequence.
- 1. Set up a compatible wallet. Choose a wallet that supports the required token standard, such as ERC-20 on Ethereum. Examples include MetaMask, MyEtherWallet, and Mist.
- 2. Choose a trading venue. Access a security token exchange or a platform that supports direct wallet integrations. Some wallets may provide access to tokenized securities through integrations with trading platforms.
- 3. Complete KYC and AML checks. Because tokenized securities are regulated financial products, you may need to provide a government-issued ID, proof of residence, and other required information.
- 4. Confirm your eligibility. Check whether the offering is available in your jurisdiction and whether it is restricted to accredited, professional, or other eligible investors.
- 5. Fund the purchase. Depending on the issuer or marketplace, you may be able to use fiat currencies such as USD or EUR through a bank transfer. Some platforms may also accept cryptocurrencies such as ETH or BTC.
- 6. Review the ownership terms. Tokenized equities may provide economic exposure to an underlying asset without giving holders direct ownership or shareholder voting rights.
- 7. Check regional restrictions and risks. Availability can vary by issuer and jurisdiction, and some tokenized securities may not be available to users in certain regions, including the UK or U.S.
*This material is provided for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency markets are highly volatile. Cryptocurrency trading involves significant risk and can result in the loss of your invested capital. Always conduct your own research before making any financial decisions.
