Equity tokenization is expanding into a multi-billion-dollar sector as investors seek alternatives to traditional market constraints such as fixed trading hours, according to MEXC CEO Vugar Usi Zade. Industry estimates place the global tokenized equity market near $6 billion.
Usi Zade attributed the shift primarily to changing capital dynamics and accessibility rather than to the visible friction points of legacy markets alone.
Stablecoin Capital Seeking Stock Exposure
Usi Zade said more than $300 billion in stablecoins sits in blockchain wallets, representing capital that seeks exposure to traditional assets without leaving the crypto ecosystem.
“Limited trading hours and cross-border transaction frictions are merely the visible symptoms of a deeper issue,” he said. “The underlying driver is changing demand. Tokenized stocks have become the first instrument allowing this capital to be invested in assets other than cryptocurrencies without leaving the blockchain ecosystem.”
Demand has been concentrated in high-growth technology sectors. MEXC data showed artificial intelligence companies accounted for six of the top 10 most-traded tokenized U.S. equities and ETFs in September, capturing 59% of top-10 volume.
Usi Zade linked that interest to access barriers and shared investor psychology. “Our user base consists of people from around the world, predominantly younger users who often lack access to traditional financial markets,” he said. “An investor in Lagos or Jakarta reads the same AI news as a fund manager in Connecticut, but they don’t have equal opportunities to buy stocks. Tokenization provides that gateway to the market.”
He added that early cryptocurrency adopters share a similar risk appetite and outlook with early AI enthusiasts, and said AI is the first market narrative that has proven as compelling to the crypto community as cryptocurrencies themselves.
Usi Zade expects interest to expand into adjacent sectors, particularly defense, aerospace, energy, and publicly traded companies tied directly to the crypto industry, such as exchanges, mining firms, and stablecoin issuers.
He also pointed to capital efficiency, noting that tokenized shares can be used as collateral, added to liquidity pools, or embedded into yield strategies—uses unavailable in legacy accounts.
Corporate Resistance and Brand Risk
Tokenized stocks still face opposition. Amazon, Tesla, Netflix, SpaceX, SoFi Technologies, and Lam Research joined other listed companies in objecting to OKXICE’s tokenized stocks plan. Nearly 50 firms have objected to being included on the upcoming platform, though none have detailed why they opted out.
Earlier, AMC CEO Adam Aron condemned Robinhood’s tokenized products linked to AMC shares, while a year before that Citadel Securities submitted a letter to the SEC warning that tokenized equities could fragment liquidity and create investor confusion.
Despite the pushback, Usi Zade said corporate issuers do not oppose tokenization itself. He said their hesitation stems from brand risk—the fear that if an unauthorized tokenized asset carrying their company’s name fails, the public and regulatory fallout will fall on them.
“They worry about having their name associated with a product they didn’t develop and being blamed if a synthetic wrapper’s price deviates from the underlying asset. The good news is that each concern is entirely legitimate, and each can be addressed,” Usi Zade told Bitcoin.com News.
He argued that retail investor interest will remain unchanged because retail investors vote with their money daily and pay little attention to issuers’ statements. Institutional investors who refuse to deal with unauthorized wrappers today, he said, “are simply waiting for issuer-approved versions to become available.”
SEC Innovation Exemption
The U.S. Securities and Exchange Commission introduced the Innovation Exemption framework to address issuer concerns. Under the framework, issuers must be notified before unaffiliated third parties tokenize their shares and can object. Trading venues also face limits on eligible stocks and trading volumes, and trading must stop when the underlying stock is halted on its primary exchange.
Critics fear the veto power poses a structural threat to on-chain liquidity. Usi Zade said it carries both positive and negative consequences.
“In the short term, this will fragment liquidity, while in the long term, it will legitimize it. A veto used as an outright ‘no’ would pose a threat, but issuers don’t actually want to say ‘no’—they want to control how their shares are represented on the blockchain,” he said.
Issuer-Approved Tokens
To prevent issuers from exercising veto rights, Usi Zade said platforms must ensure full transparency regarding the structure of tokenized shares, establish a channel for engaging with issuers before listing, and agree on a mechanism for converting third-party wrappers into issuer-approved tokens.
Looking ahead, he projected rapid scaling as major infrastructure players such as Nasdaq, ICE’s New York Stock Exchange, and the DTCC enter the space.
“By 2027, I expect this market to exceed $25 billion, with at least 10 major issuers operating in it,” Usi Zade said. “Within three years, tokenized equity trading volume on major exchanges will surpass cryptocurrency spot trading volume, as the potential audience includes every equity investor worldwide.”
