Can U.S. Stock Tokenization Go Further This Time?
In July 2025, Robinhood announced that users could trade U.S. stocks on the Arbitrum chain 5×24 hours; Bybit and Kraken announced the launch of xStocks provided by the Swiss compliant asset tokenization platform Backed Finance; Coinbase even applied to the SEC to issue tokenized securities. The market was abuzz, and on-chain trading of U.S. stocks became the focus of user attention.
Is this the first time U.S. stocks have gone on-chain?
As early as the summer of DeFi in 2020, Mirror Protocol launched synthetic assets called mAssets on the Terra chain, allowing users to "hold" U.S. stocks like Apple and Tesla without KYC or brokerage accounts. At that time, Mirror was full of ambition, but ultimately faded away with the collapse of Luna and the SEC's heavy-handed regulation.
Five years later, new generation U.S. stock tokenization products like xStocks are making a comeback. How do they differ from the Mirror of that time in terms of asset structure, compliance, and technology stack? Can U.S. stock tokenization go further this time?
1. Asset Structure Comparison: From On-Chain Mapping to Real Anchoring
The mAsset of Mirror Protocol is essentially a synthetic asset on-chain. It does not represent any real-world equity or asset ownership; it merely synchronizes the real U.S. stock prices through oracles to simulate a "price-linked but asset-untethered" synthetic target via smart contracts. The issuance of mAssets relied on the over-collateralized algorithmic stablecoin UST, and once the underlying stable mechanism faced systemic risks, such as the collapse of the Terra ecosystem in May 2022 (UST de-pegging), the entire asset system immediately fell into a chain reaction of value zeroing. The core issue of this architecture is that it anchors "price" rather than "equity" or "assets," making it more akin to derivatives rather than ownership certificates.
In contrast, xStocks adopts a completely different asset anchoring structure. It is initiated by the Swiss compliance agency Backed Assets, with a clear and off-chain verifiable underlying asset structure: real stocks are first purchased through brokers like Interactive Brokers, and then held by regulated custodians such as Clearstream, InCore Bank, and Maerki Baumann. The generation of tokens follows a "buy first, then go on-chain" approach, ensuring that each xStock token corresponds to a real stock position, guaranteeing a 1:1 correspondence with real holdings. In short, every on-chain purchase by users is anchored by real stock transactions.
xStocks' tokens are issued under the SPL standard on the Solana public chain, supporting 5×24 hours of on-chain trading and instant settlement, breaking the traditional securities market's limitations of working days and trading hours. More importantly, compared to the vulnerabilities exposed by Mirror's DeFi synthetic asset system in extreme market conditions, xStocks' asset structure introduces real assets, compliant custody, and on-chain audit mechanisms, freeing it from the fragility of DeFi synthetic assets.
2. Compliance Logic Comparison: From Gray Areas to Compliance Focus
The birth of Mirror Protocol coincided with the explosive window of DeFi in 2020, where a regulatory vacuum and experimental frenzy coexisted in the on-chain ecosystem. At that time, KYC/AML was not common; instead, anonymous, unregulated, and borderless trading methods were the norm. Mirror emerged during this period, allowing users to mint mAssets by collateralizing UST or LUNA without identity verification, enabling global users to trade U.S. stock-mapped assets 24/7.
However, this model, based on synthetic assets and algorithmic stablecoins, lacked regulation and real assets, laying hidden dangers for the future. In 2022, following the global shock from the LUNA/UST collapse, the SEC charged Mirror and Terraform Labs, clearly classifying mAssets as "unregistered securities." Since then, on-chain synthetic assets have faced a regulatory winter, and the Mirror model became a typical example of experimental failure, marking the end of the first generation of Web3's mapping of real-world finance.
Today, xStocks is driven by a hybrid of TradFi and Web3 entities with compliance resources and traditional financial backgrounds, such as Kraken, Robinhood, and Backed Finance. Kraken complies with the EU's MiFID II directive, and both Backed Assets and Dinari have obtained licenses for security token issuance; trading requires KYC/AML verification, and off-chain settlement processes are traceable. In 2025, the new SEC Chairman Paul Atkins referred to tokenization as a "financial digital revolution," with policy direction shifting from suppression to guidance.
It is important to note that xStocks is not an equity token but a tracking asset structured like a bond, essentially closer to a transferable stablecoin plus a yield certificate. While this structure can circumvent the high regulatory barriers associated with securities, it also means it lacks voting rights and corporate governance rights, and involves more complex dividend and distribution structures that require intermediary entities (such as Kraken's Bermuda subsidiary PDSL) for distribution. Additionally, while the bond model brings compliance advantages in taxation and registration (such as no stamp duty and anonymity), it distances xStocks from the narrative of "on-chain U.S. stock ownership," with some users even stating, "on-chain stock tokens feel more like a castrated version of stocks created to avoid taxes."
3. Technology Stack Comparison: Ecological Closure vs. Protocol Integration
Mirror Protocol was built on the Terra chain, with its ecosystem primarily relying on the internal circulation of LUNA and UST. Although Terraswap and Anchor Protocol were relatively mature at that time, they were limited by a singular ecosystem, making cross-chain collaboration difficult.
In contrast, xStocks chose to deploy on high-performance multi-chain public chains (such as Arbitrum, Solana, Base), possessing cross-chain asset circulation capabilities. The xStocks tokens can be used for lending and LP mining in Solana DeFi protocols, gradually moving towards on-chain composability.
However, xStocks still faces issues with insufficient liquidity in trading. Currently, its on-chain liquidity is highly concentrated in a few assets, such as TSLAx and SPYx, with many asset pools having fewer than 20 trades, significant slippage, and a lack of liquidity support mechanisms. Furthermore, xStocks still lacks deep integration mechanisms similar to perp DEX on-chain, leading to a noticeable gap in overall trading experience compared to contracts and U.S. stock CFD products on CEX, making it difficult to meet the demands of large-scale traffic migration or high-frequency trading in the short term.
According to on-chain data from defioasis, on the first day of product launch on June 30, 2025, the on-chain trading volume was $1.338 million, with 1,225 unique trading users and 2,510 trades;
On July 1, despite a significant increase in volume, trading volume rose to $6.64 million, with 6,565 new unique trading users and trades jumping to 17,879, but trading remained concentrated in a few assets.
Trading was mainly distributed among top assets like TSLAx ($1.71 million), SPYx ($1.53 million), and CRCLx ($940,000), while most other assets had very limited trading, with some asset pools even having zero liquidity, making effective matching difficult.
4. Current Landscape of U.S. Stock Tokenization
StableStocks: StableStocks is a CeDeFi company focused on the on-chain stock ecosystem, aiming to create a complete closed loop for on-chain stock ecology. Its tokenization path relies on a self-built compliant brokerage system and asset mapping technology, providing users the ability to invest directly in real quality stocks through stablecoins. Its core goal is to achieve the holding, lending, trading, and derivative construction of traditional stock assets on-chain, facilitating cross-platform liquidity for the same on-chain stocks to enhance the depth and efficiency of on-chain assets. Its product structure supports users entering the U.S. stock market in stablecoin form, with plans to cover various assets, including blue-chip stocks, ETFs, and thematic assets in the future.
xStocks: xStocks is currently the largest project in terms of on-chain U.S. stock trading volume, accounting for nearly 90% of on-chain liquidity. Its compliance structure relies on the Swiss DLT law and a dual SPV (special purpose vehicle) structure from Liechtenstein and Jersey, ensuring legal compliance on the issuance side. xStocks' tokens are issued on the Solana public chain, adopting the SPL standard and introducing Chainlink price feeding mechanisms to achieve high-frequency synchronization of prices with off-chain markets.
Robinhood: As a representative of traditional brokerages entering Web3, Robinhood emphasizes a "compliance-first" and "ecological closed-loop" model. Its European operations are regulated by the Bank of Lithuania and have obtained MiFID II and MiCAR crypto asset licenses, qualifying it to issue security tokens within the EU. Robinhood is currently deploying a stock tokenization prototype on the Arbitrum Layer 2 network, with plans to launch its proprietary L2 to achieve a technological closed loop under regulatory compliance.
Coinbase: As a leading infrastructure provider in the U.S. market, Coinbase's tokenization path is directly influenced by the SEC's policy advancement pace. Currently, Coinbase is awaiting regulatory exemptions to activate its licensed subsidiaries to conduct clearing, custody, compliance reporting, and other business processes, aiming to achieve the native compliant issuance of U.S. stock assets on-chain. Coinbase's tokenization module is deployed on its self-developed Base Layer 2 network, with the first batch expected to include 50–100 U.S. stocks and ETFs, covering standard blue-chip stocks and some thematic assets, and will support dividend distribution and on-chain settlement.
Against the backdrop of stablecoin legislation gradually taking shape, the market's attention to compliance and tokenization is extremely high. However, stock tokenization does not mean replacing traditional stock markets; the greatest value of stock tokenization lies in connecting and opening the door to the crypto world for traditional investors while providing crypto users with tools to anchor real assets. Just as the launch of Bitcoin and Ethereum ETFs made it possible for mainstream capital to enter the crypto market, stock tokenization is also expected to become an important channel for the next round of capital inflow.
Author: @crypto_crane888
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