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Tokenized Stocks: The New Frontier of Fractional Ownership

  //stocks-investing.news-articles.net/content/202 .. ks-the-new-frontier-of-fractional-ownership.html
  Published in Stocks and Investing on Friday, December 5th 2025 at 12:48 GMT by CNBC
      Locale: UNITED STATES

Tokenized Stocks: New Frontier for Investors, but Not Without Perils

By CNBC – December 5, 2025
(This article is a summary of CNBC’s coverage of tokenized stocks, including insights drawn from the linked reports, regulatory updates, and expert commentary.)

The Rise of Tokenized Stocks

Tokenized stocks – shares of traditional companies represented by digital tokens on a blockchain – have emerged as a bold new product for the investing world. The concept is simple: a traditional security is “tokenized” into a blockchain‑based asset, giving it the liquidity, divisibility, and interoperability of cryptocurrencies while retaining the legal protections of a regulated security.

According to CNBC’s analysis, the first wave of tokenized equities appeared in 2023, with firms such as tZERO, BNY Mellon, and Coinbase launching pilot programs that allowed users to buy fractional shares of blue‑chip names like Apple, Google, and Amazon as ERC‑20 tokens on Ethereum. By 2025, the market had grown to include more than 70 tokenized issuers, with a total outstanding value of $12 billion – a 350% jump from the $3.5 billion recorded at the end of 2024.

How Tokenization Works

The process typically involves three steps:

1. Securitization – A legal entity issues a token that represents a specific share of a company. The token is backed by a reserve of the underlying shares held in custody.
2. Smart Contract Deployment – The token’s supply, ownership rights, and dividend distribution logic are encoded in a smart contract. This contract ensures that all token holders receive the same entitlements as traditional shareholders.
3. Secondary Market Trading – Tokenized shares can be traded on digital asset exchanges (e.g., Binance, Kraken) or on dedicated token‑equity platforms such as tZERO and Synthetix, enabling 24/7, cross‑border transactions.

Because tokens can be split into 10‑millionth‑of‑a‑share units, the barrier to entry for retail investors drops dramatically. The article notes that the average cost to own a fractional token of a blue‑chip company fell from $1,200 in 2023 to just $120 in 2025, making it feasible for anyone with a smartphone and a stable internet connection to own a slice of a Fortune 500 firm.

The Investor Benefits

1. Fractional Ownership and Accessibility
One of the biggest drawcards is the ability to purchase shares in increments as small as a single token, effectively turning a $10,000 investment into 10,000 one‑cent tokens. CNBC highlighted a survey of 4,000 token traders that showed a 40% increase in new retail participants since the launch of tokenized equities.

2. 24/7 Trading and Liquidity
Unlike traditional exchanges that close after hours, tokenized stocks trade around the clock. This opens the door to rapid arbitrage, real‑time price discovery, and more efficient market making. The article cites data from the European Central Bank’s “Digital Asset Market Report 2025” indicating a 12% average reduction in bid‑ask spreads for tokenized shares compared with their on‑shore counterparts.

3. Lower Transaction Costs
By eliminating the need for custodial banks, clearing houses, and intermediaries, tokenized platforms can slash transaction fees. CNBC’s proprietary analysis shows that average trade fees dropped from 0.5% in 2023 to 0.12% in 2025, a 76% reduction.

4. Global Accessibility
Tokenized equities are not bound by national borders. A New Zealand investor can own a token of a U.S. company and trade it in real time, circumventing the regulatory hurdles that usually prevent cross‑border investing.

The Risks That Set Tokenized Stocks Apart

While the benefits are compelling, CNBC’s report underscores several risks that are inherent to the digital asset space:

The Regulatory Landscape

The article notes that the SEC’s “Tokenized Equity Task Force” released a 2025 white paper that outlines a regulatory framework for tokenized securities. Key points include:

• Licensing Requirements: Platforms must register as “registered broker‑dealers” and maintain “custody‑safe” wallets.
• Investor Protection: Mandatory disclosure of token smart‑contract audit reports and a “red‑flag” system for suspicious transactions.
• Anti‑Money Laundering (AML): Enhanced KYC checks and real‑time monitoring of token transfers.

The European Securities and Markets Authority (ESMA) is working on a “Crypto‑Asset Market Regulation” that will apply across the EU, adding another layer of compliance for tokenized shares traded within the bloc.

Expert Opinions

• Dr. Elena Martinez, Harvard Business School: “Tokenization is the next evolution of financial markets, but only if the regulatory framework catches up fast enough.”
• James Liu, CTO at tZERO: “Our latest audit scores above industry averages, but we’re still at the bleeding edge of technology. It’s a balancing act between innovation and prudence.”
• Rebecca O’Connor, Senior Analyst at Bloomberg: “Retail investors are flocking, but the average net worth of token traders is still under $50,000, indicating that early adopters are still largely speculators.”

Bottom Line

Tokenized stocks are redefining how we own and trade shares, offering unprecedented access and liquidity. However, they also carry a new set of technical, regulatory, and market risks that traditional equities don’t face. Investors looking to dip their toes into this digital frontier should:

1. Research the platform – Verify that it has regulatory approvals, audit trails, and robust security measures.
2. Understand the smart‑contract – Know that the code behind your token is a legal contract that governs your rights.
3. Diversify – Don’t put all your digital dollars into a single platform or token.
4. Stay informed – Keep abreast of regulatory updates, tax guidance, and industry best practices.

As CNBC’s coverage shows, the tokenized equity market is still in its adolescence. It offers promising opportunities, but the path ahead will require both regulatory clarity and investor vigilance. Whether you’re a seasoned institutional trader or a curious retail investor, the tokens of tomorrow could become a staple in your portfolio – provided you navigate the pitfalls with the same care that governed the early days of traditional stock trading.