Tokenized stocks are rapidly evolving in the cryptocurrency space, and XStocks by Backed Finance represents a new step in this direction, with a recent launch on Ethereum.
Launch of XStocks on Ethereum
XStocks, a tokenized stock product by Backed Finance, has officially launched on Ethereum, offering around 60 tokenized stocks including NVIDIA, Amazon, Tesla, Meta, and Walmart. Previously, the project operated on the Solana, BNB Chain, and Tron blockchains. A representative from Kraken stated, “Ethereum is one of the world’s most widely adopted smart contract networks—and XStocks are built to meet users where they already are.”
Controversy Surrounding Tokenized Stocks
Proponents of tokenized stocks claim that this technology democratizes equity investment by removing unnecessary hurdles and regulatory barriers. However, tokenized equities remain in a legal gray area. Legal experts note that they may not confer the same rights to investors as holding traditional stocks, including a lack of direct claims on company assets or voting rights. Moreover, global regulators, including the SEC in the U.S., are pushing back against this trend.
Future of Tokenized Stocks
Despite pressure from regulators, fintech and crypto firms continue to expand their offerings of tokenized equities. For instance, Robinhood launched a blockchain for tokenized stock trading in Europe at the end of June. According to analytics platform RWA.xyz, the market capitalization of tokenized stocks stands at $342 million, representing just 1.2% of the total $27.9 billion market cap for tokenized real-world assets.
The launch of XStocks on Ethereum could mark an important step in the development of the tokenized stock market, yet its future remains uncertain due to legal and regulatory challenges.
