U.S. equity tokenization is gradually moving from an experiment within the crypto industry into the regulatory framework of traditional securities markets.

On September 21, Bernstein released the report "Equity Tokenization Primer: Innovation Exemption, Operating Models, Industry Landscape, and Potential Winners." The report argues that the SEC's newly introduced "Innovation Exemption" is a major breakthrough for the U.S. tokenized securities market.

In the past, equity tokenization appeared mostly in offshore markets, or was provided by third-party platforms through synthetic asset structures to offer U.S. equity price exposure. But this Innovation Exemption explicitly permits qualifying tokenized securities trading venues to operate on public blockchains and specific DeFi infrastructure for the first time.

Bernstein believes this means that public blockchains and decentralized finance infrastructure, including Ethereum, Solana, and Uniswap, have for the first time gained practical validation within the U.S. securities regulatory framework.

What truly matters about the Innovation Exemption is not short-term trading volume

From the perspective of the rules themselves, this Innovation Exemption remains quite cautious.

The SEC did not directly establish a permanent tokenized securities regime, but instead allowed qualifying Tokenized Securities Venues to temporarily exempt certain traditional exchange regulatory requirements under specific conditions.

At the same time, regulators still set multiple guardrails, including issuer participation requirements, trading volume limits, and caps on the number of listable securities.

Therefore, Bernstein believes that in the short term, the incremental trading volume and revenue that the innovation exemption itself can bring may still be limited.

But what truly matters is this: the SEC is beginning to allow traditional securities markets and 24/7 on-chain capital markets to conduct real integration experiments within a regulated framework.

For regulators, this phase allows them to observe the risks that on-chain trading, settlement, and market structure may bring; for the industry, it allows early exploration of how stocks can be issued, circulated, and settled on public blockchains.

If relevant regulatory rules gradually mature in the future, while trading and listing restrictions are further relaxed, Bernstein expects that tokenized securities may only then truly begin to have a substantial impact on U.S. stock trading volume.

Stock tokenization essentially has three different models

What the market currently calls "stock tokens" are actually not the same type of product.

Bernstein divides them into three main operating models.

The first is the issuer-led model.

Listed companies directly participate in stock tokenization, with on-chain tokens corresponding to traditional shares and replicating as fully as possible the economic and governance rights held by traditional shares, including ownership, dividends, and voting rights.

From a legal and economic standpoint, this model is closest to a true "stock on-chain."

The second is the depository-led model.

Banks, custodians, or other regulated financial institutions hold the underlying securities and issue corresponding tokens on-chain. This structure is similar to depositary receipts in traditional finance, except that securities ownership and transfer records are further moved onto the blockchain.

The third is the third-party-led model.

Platforms purchase or hold the corresponding underlying assets, then issue tokens to users, providing investors with economic exposure corresponding to a certain stock. A large number of early crypto stock products belonged to this category, and their core is closer to "stock price mapping" or synthetic assets rather than true on-chain equity.

However, Bernstein believes that the boundaries between the three models are gradually blurring.

More and more third-party issuers are also beginning to use legal structures to pass dividends, voting rights, and even partial ownership interests to token holders.

Therefore, the focus of future competition in stock tokens is likely to no longer be just "whose token is closest to a real stock."

The real moat is distribution, liquidity, and 24/7 price discovery

If issuing stock tokens itself becomes increasingly easy, where does the industry's real barrier lie?

Bernstein's answer is threefold: onshore distribution, liquidity, and 24/7 price discovery capability.

In the past, many U.S. listed companies took a cautious or even opposed stance toward offshore stock token products.

A core reason is that these products are usually not authorized for issuance by the companies themselves, and companies cannot control their market structure, investor base, or price formation process.

But if tokenized securities can operate on regulated platforms within the United States in the future, while maintaining round-the-clock trading, faster settlement, and DeFi composability brought by blockchain, then issuers' attitudes may change.

This is also where Bernstein believes the significance of an innovation exemption lies: it is not merely adding a layer of "blockchain wrapping" to existing stocks, but may redesign how stocks are issued, traded, settled, and globally distributed.

Offshore stock tokens have already proven: global demand is real

Even if some offshore stock tokens do not meet the SEC's definition of formal tokenized securities, they have still proven one thing—global investors have real demand for on-chain trading of U.S. stocks.

Especially for overseas users who cannot easily access the U.S. securities market, stock tokens provide an entry point closer to the crypto trading experience: round-the-clock trading, on-chain settlement, direct exchange with stablecoins, and further access to DeFi.

Bernstein believes that this product-market fit is already reflected in actual trading data. Robinhood launched Robinhood Chain in July, and there are currently more than $160 million in stock tokens on-chain, with cumulative DEX trading volume exceeding $10 billion.

This means stock tokens are not just a proof of concept, but are forming real on-chain trading activity.

At the same time, it also produces an additional effect: stock token trading will further increase demand for underlying blockchains, DEXs, stablecoins, and other crypto-native infrastructure.

Bernstein pointed out that this is also one of the important backdrops behind the recent renewed investor attention to assets such as ETH, SOL, and UNI.

Who could become the winners of this round of stock tokenization?

Among the listed companies covered by Bernstein, the benefit logic for different companies is not exactly the same. Figure and Bullish are laying out tokenized securities products that are closer to an issuer-led model.

If issuers directly participating in putting stocks on-chain becomes mainstream in the future, then platforms capable of providing issuance, trading, and infrastructure services may occupy an important position.

At the same time, Robinhood and Coinbase have already taken the lead in entering the offshore stock token market. For both, stock tokens are not just the addition of a new trading category. Once stocks, crypto assets, and stablecoins gradually enter the same on-chain trading system, they actually have the opportunity to further bring traditional securities users into their own crypto infrastructure.

In particular, Robinhood has already begun building its own on-chain ecosystem, which means stock trading generates not only brokerage commissions or order flow revenue, but may also further translate into revenue from the underlying blockchain, DEXs, and other on-chain businesses.

Another more direct beneficiary is Circle. No matter how stocks are ultimately tokenized, the on-chain market needs a stable settlement asset with sufficient liquidity. For now, stablecoins remain the most natural choice.

Bernstein believes that USDC combines relatively high liquidity, a regulatory compliance foundation, and DeFi market share, so as the scale of tokenized stock trading expands, USDC's use as an on-chain securities settlement currency may also increase in tandem.

In other words, what stock tokenization ultimately competes over is not just the stock trading market.

It may simultaneously drive a repricing of an entire set of infrastructure — from public blockchains such as Ethereum and Solana, to DEXs such as Uniswap, to trading gateways such as Coinbase and Robinhood, and to the stablecoin settlement layer represented by Circle.

And the SEC's innovation exemption is, for the first time, truly connecting this infrastructure — which originally operated mainly within the crypto market — to the traditional U.S. securities market.

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