What are tokenized stocks?
A tokenized stock is a blockchain token whose price tracks a listed company's share, usually backed by real shares held with a broker. It lets you follow a stock such as Apple or NVIDIA from a crypto wallet, but it is not the share itself. This guide explains how tokenized stocks work, what they are good for and where the risks lie.
How tokenized stocks work
In the common model, an issuer buys and holds real shares through a broker and issues tokens against them. Each token represents one share or a fraction of one, and its price moves roughly in line with the share on the exchange.
There are also synthetic tokens with no real shares behind them that only mimic the price. Before buying any stock token, ask what backs it and who issued it.
Tokenized stocks vs real shares
The differences matter, so be clear on them before you buy:
- Ownership: a real share makes you a shareholder; a token is a claim on the issuer.
- Voting rights: real shares usually carry them; tokens usually do not.
- Where it is held: a real share sits in a brokerage account; a token sits in a blockchain wallet.
- How you pay: real shares with dollars in a brokerage account; tokens with crypto such as USDT.
- Transfers: a token can move on the blockchain at any hour, but its reference price only updates while the stock exchange is open.
- Control: the token issuer can pause transfers or block an address.
What happens to dividends?
How a tokenized stock handles dividends depends on the rules of each issuer. Some reinvest the dividend into the token's price, while others handle it differently.
In Waletifi, these details are shown in the app before you buy. If dividends matter to you, read them there.
Benefits of tokenized stocks
- Buying with USDT, without opening a foreign brokerage account.
- Buying any amount you choose, not necessarily a whole share.
- Keeping them in your own wallet, next to the rest of your crypto.
- Transparent transactions you can see on the blockchain.
Risks of tokenized stocks
Tokenized stocks carry all the risks of the share itself, plus a few new ones:
- Issuer risk: the token's value depends on the issuer doing its job and holding the backing shares.
- Freezes: the issuer can pause transfers, block addresses and even remove tokens from an address.
- The issuer's terms exclude some countries, including Iran and Afghanistan, and it may restrict addresses it links to them; weigh this like the other risks before buying.
- Limited liquidity: a large trade on the network can move the price.
- Price gaps: when the US market is closed, the token price can jump at the next open.
- Fake tokens: counterfeit tokens with famous company names are common; never buy a token someone sends you or links you to.
Tokenized stocks in Waletifi
Waletifi's Stocks section is coming soon and will be enabled country by country. In it you buy tokenized shares of companies such as NVIDIA, Apple, Tesla, Google and SpaceX on Ethereum with USDT, and keep them in your own wallet.
These tokens are backed 1:1 by real shares held with a US broker. The conversion fee and the Ethereum network fee in ETH are shown before you confirm, and the transaction is signed on your phone.
