Tokenized stocks could follow the growth trajectory of stablecoins over the next four to five years as financial institutions bring equities and exchange-traded funds onto blockchain networks, according to Guilhem Chaumont, CEO of crypto market maker Flowdesk.
The tokenized stock market has reached approximately $4.63 billion in capitalization, comparable to the stablecoin market in March 2020. Stablecoins have since expanded to approximately $297 billion, illustrating the potential scale of adoption that tokenized equities could eventually achieve.
The market remains concentrated, with Binance bStocks, Ondo Finance, and xStocks accounting for more than 80% of tokenized stock capitalization. Approximately 86% of tokenized stocks are backed by collateralized structures in which third-party issuers hold underlying securities and issue blockchain tokens representing exposure to those assets.
Institutional Adoption Faces Custody and Regulatory Challenges
Despite growing interest in tokenization, major financial institutions remain cautious about moving substantial amounts of capital onto blockchain networks. Institutional investors still face operational questions about whether they can tokenize assets at scale, how those assets would be held, and whether associated risks meet internal compliance requirements.
Recent security incidents have reinforced institutional hesitancy. Following the Binance security breach that resulted in an estimated $6.3 billion in unauthorized withdrawals from the exchange's hot wallets, custody concerns have intensified. Binance pledged to cover customer losses, with approximately $3 billion in affected assets frozen.
Chaumont expects institutional adoption to accelerate as custody arrangements, settlement infrastructure, and regulatory standards mature, allowing tokenized securities to operate within established financial risk frameworks.
Market Growth Reflects Expanding Interest
The market for tokenized equities expanded rapidly during 2026, climbing from less than $1 billion at the beginning of the year to more than $4.6 billion by late October. However, tokenized equities remain a small fraction of the traditional stock market, and their growth is not guaranteed to replicate stablecoins' trajectory.
Regulation and institutional confidence are expected to determine the pace of adoption over the next several years, rather than technological availability alone.
