Tokenised stocks are moving closer to mainstream financial markets. In September, Nasdaq announced a $100m investment in Kraken’s parent company as the two companies expand their work on tokenised equities and always-on markets. The development shows that there is growing interest in a market structure where securities could potentially trade and settle beyond traditional exchange hours.
At the same time, tokenisation raises an important question: does putting a stock on a blockchain make the existing market more efficient, or does it fundamentally change how ownership and transactions are handled?
What exactly is a tokenised stock?
In traditional equity markets, investors buy and sell shares through a network of stock exchanges, brokers, custodians, and clearing houses. Ownership is recorded within this financial infrastructure, while intermediaries help execute trades, safeguard securities, and update ownership records. Tokenisation is now revolutionising the market by changing the infrastructure through which these ownerships are claimed and transferred.
Stock tokenisation is the process of representing a traditional share, or a claim linked to that share, as a digital token that can be issued, held and transferred using blockchain infrastructure. This blockchain is a digital infrastructure on which this token exists, recording who owns the token and to whom the token is transferred to. Instead of a traditional stock being recorded through custodians and brokers, a token can be issued, stored, and transferred on a blockchain.
A tokenised stock does not automatically transfer shareholder rights. Depending on how the token is structured, it provides the holder with economic exposure to the reference stock, while shareholder rights such as voting rights, dividends, or legal ownership may be handled separately. The distinction between owning the token and owning the underlying security is therefore central to understanding how tokenised stocks work. Although tokenisation is not yet widespread, estimates of its future scale are significant. Boston Consulting Group has estimated that approximately $16trn of assets could be tokenised by 2030.
Why markets still close
As tokenisation progresses quickly, it is important to look at where traditional exchanges sit right now. In April the SEC, the American regulator, announced the approval of the Nasdaq’s proposal to increase its trading session to 23 hours a day, five days a week. Nasdaq and the SEC consider it partly as a competitive answer to crypto exchanges, which offer 24/7 trading on blockchain-based infrastructure.
Now two main questions remain. Why 23/5 and not 24/7? The trading session lasts 23 hours because the Nasdaq systems need an hour break each day. That window is used to roll over to the next business day and to process corporate actions, such as a dividend payment. The weekends are closed because the banking system also shuts down on weekends and without liquidity, there is not enough oxygen for the market to breathe.
And the other question: will traders be up all day watching the market? Simple answer, no. Most of the transactions will be operated by market makers and trading algorithms. Why? Because outside the regular trading session from 9.30 a.m. – 4 p.m., few people are active, which means thinner liquidity and wider spreads prevail, implying worse execution. Furthermore, the opening and closing auctions still set the benchmark price.
Whole-day trading is nothing entirely new to the sector. The foreign exchange market already operates 24 hours a day from Monday to Friday. However, this does not mean that currencies change hands immediately. A trade can be agreed today, while settlement, the actual exchange of the currencies, often happens up to two business days later.
This shows that keeping a market open is only one part of the challenge. Moving from 23/5 towards a true 24/7 stock market also means adapting the infrastructure.
What is holding tokenisation back?
When a company or government issues a tokenised asset, it must choose a specific digital network to record and update the digital certificate of ownership. The problem is that many of these networks don’t connect with each other. It’s like having several different online marketplaces that can’t share products or customers.
This creates two problems: first, buyers and sellers get separated instead of gathering in one place, so trading becomes less active, and it’s harder to get a fair price. Second, any bank or investor that wants to use more than one network must build a separate connection to each one, which takes more time and costs more money.
Another obstacle lies on the payment side of the trade. Every trade is a two-part deal: the buyer receives the asset, and the seller receives the money. The issue is that, right now, there’s no widely trusted digital cash. Instead, sellers often get paid with stablecoins, price-stable crypto tokens, or a bank’s own digital token. These stablecoins and digital tokens are not completely risk-free. Even the safest stablecoins don’t always hold their value perfectly, and a bank’s digital token is only as safe as the bank. So, a seller might end up holding a payment they’re not fully comfortable with. Because of this, people are more cautious about doing business at scale on these platforms, since the money side of the deal doesn’t feel as safe as the actual cash they’re used to.
Can blockchain replace the middleman?
Does tokenisation remove the function of a clearing institution? After a transaction of a stock is agreed, clearing houses help ensure that the stock and payment is transferred correctly between buyers and sellers. For example, a hedge fund buys cash equities from an investment bank. Both counterparties face the post-trade institution, e.g. Euroclear, which completes the check and verification of the trade. When tokenising the stock, ownership and transfers are recorded on the blockchain. Tokenisation can settle much faster and simpler. Hence, there is less need for separate institutions to reconcile their post-trade records.
Even if the blockchain records the transaction, a system needs to ensure that the stock exists, the seller can deliver the stock, and the buyer has paid. Tokenisation is more likely to weaken or reshape the function of post-trade institutions rather than making them outdated.
A token is not always a share
Buying a tokenised stock does not automatically make you a shareholder. It’s the legal framework that decides. As an example, Robinhood’s stock tokens in Europe aren’t actual stock, they are just financial contracts tied to US shares. According to the 2026 OMFIF and Luxembourg for Finance report, holders have no voting rights and should Robinhood Europe fail, they would be creditors, not shareholders.
Luxembourg law allows the opposite. The token is the security itself, much like an entry in a company’s share register, just kept on the blockchain. Transferring the token means transferring ownership, with no separate register to update.
Luxembourg takes a different route
Most countries still require securities to be issued the traditional way. Luxembourg, however, allows securities to be issued directly on the blockchain, via Luxembourg’s four blockchain laws, the latest adopted in December 2024. The Luxembourgish government is actively leading by example by issuing Digital Treasury Certificates, a €50m project that exists without paper and relies on tokenisation. The European Investment Bank has also issued a €100m digital bond under those blockchain laws.
Until Blockchain Law IV, this new fully digital path was open only to debt. It now extends to shares of companies not listed on a stock exchange and to fund units. For a financial centre like Luxembourg, which relies heavily on funds, that matters.
The infrastructure still matters
Traditionally, the institution keeping the register sat at the top of the chain, and every market participant had to go through it. The new control agent acts like an auditor, keeping count of every token issued and checking that the total matches what investors hold at their bank. Fewer layers between companies and investors can mean faster transfers and often lower costs. Luxembourg fintech Investre SA became the first firm licensed for this role in July 2025. Since the token acts as the share, it comes with the right to dividends and voting.
The law does not cover shares listed on stock exchanges such as Nasdaq stocks. Therefore, Luxembourg’s bet is less on 24/7 trading and more on the infrastructure behind it. The country is home to Clearstream, one of the institutions that make sure shares and money actually change hands, and to Europe’s largest fund industry. Whilst tokens move extremely quickly, the real bottleneck remains the payment, which is still limited by banking hours.
The next step for financial markets
At its core, tokenisation will change how ownership is recorded and transferred. Once a stock exists as a token on a blockchain rather than in a traditional custodian’s ledger, the technical barrier that forces markets to close at 4 p.m. and reopen the next morning will soon disappear. Still, the shift from theory to practice is not automatic. For a financial centre like Luxembourg, this creates both a challenge and an opportunity. The country’s expertise in fund administration, custody, and cross-border settlement is exactly the kind of infrastructure that a tokenised, always-on market will continue to depend on, provided regulation and market practice evolve together.
Looking ahead, stocks are not the finish line. Bonds, funds, and other asset classes are already moving in the same direction, and estimates that suggest trillions of dollars in assets could be tokenised by the end of the decade show that this is not a passing trend. Whether markets end up trading 24/5 or 24/7, the underlying shift is the same: ownership is moving onto digital rails, and the institutions built around the old rails will need to adapt rather than disappear.
