🔺 Layer One: Tokenized stocks surge as CFTC chair heralds era of 'mass tokenization'

Tokenized stocks surge as CFTC chair heralds era of 'mass tokenization'

Speaking at the U.S. Treasury Market Conference last week, CFTC Chair Michael Selig declared that regulators should prepare for an era of “mass tokenization” in financial markets. He noted that shifts already underway mean “the next decade will likely bring more change to financial markets than the previous several decades combined.”

The comments echo those made by Paul Atkins, Selig’s counterpart at the SEC, who said last month that the agency was taking steps to bring U.S. capital markets into the “digital age.” The statement accompanied the SEC’s new five-year “innovation exemption,” which gives certain onchain trading venues conditional relief from exchange registration rules.

Bitwise CIO Matt Hougan framed these developments as a direct consequence of the Clarity Act stalling in the Senate on September 15. Hougan argued that the regulators were spurred into action by the bill’s failure, meaning “crypto sacrificed long-term certainty and got better rules, faster.”

This increasingly permissive regulatory backdrop has coincided with another surge in tokenized equities. Tokenized stocks breached $3 billion in total onchain value for the first time last month and now sit at around $3.25 billion. The total number of holders has also increased significantly, rising more than 60% over the past 30 days to around 4.1 million.

The bulk of the recent capital surge can be attributed to Securitize’s SECZ, which debuted on the NYSE in July. Since then, the tokenization giant has brought around 18% of its own equity onchain, representing $430 million in value. $132 million of this came onchain over the past seven days alone, almost ten times the increase recorded by the next-largest asset across the same timeframe.

The overwhelming majority of that growth occurred on Avalanche, in turn driving the network to outperform other blockchains in both seven-day tokenized equity inflows and 30-day overall RWA inflows.

However, data from Token Terminal and RWA Foundation shared by Avalanche also reveals a notable divergence: capital flows, holder growth, and transfer volumes are not necessarily accumulating in the same places.

Among issuers, Robinhood’s Stock Tokens led the way in terms of holder growth, adding 83,200 new holders over the past seven days. Securitize itself did not make the top five on this metric, with its onchain equity concentrated among just 74 holders overall. Likewise, Solana dominated new holder growth by blockchain at 123,500, while Robinhood Chain added 83,200.

Some of that holder growth may reflect the recent rise of stock-linked memecoins, rather than investors deliberately purchasing tokenized equities themselves. A growing “memecoin-stock” flywheel on Robinhood Chain has seen projects distribute stock tokens using the trading fees from speculative crypto assets, potentially inflating the number of wallets holding tokenized equities.

Altogether, the data suggests two parallel adoption patterns: concentrated capital entering products such as Securitize’s SECZ on Avalanche, and rapidly expanding holder counts across more retail-focused ecosystems.

Despite this rapid growth, however, tokenized stocks remain a niche corner of the wider equities market. $3.25 billion in value pales in comparison with a U.S. equity market worth close to $80 trillion. But with the world’s largest stock exchange, the NYSE, already preparing its own platform for tokenized securities trading, that gap could begin to narrow.

A report from Binance Research last month estimated tokenized equities could grow to $349 billion by 2030, according to its base case, or as high as $987 billion in its bull case.

Podcast Recap: OpenTrade CEO cites bank lobby's $3 trillion deposit-flight warning

Last time on the podcast, we were joined by David Sutter, co-founder and CEO of OpenTrade, to discuss the evolving regulatory environment, institutional demand for DeFi and the rapid growth of stablecoins in emerging markets.

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In the Headlines: The stories driving the conversation this week

• Robinhood this week announced plans to offer crypto perpetual futures and 24/7 trading for select U.S. stocks and ETFs. Expected to launch in the coming months, its perps product will let eligible U.S. users trade with up to 10x leverage on bitcoin, ether, and several other assets. At the same time, the company also unveiled Robinhood Agents, which lets users build AI agents in its app to conduct research, develop strategies, and automatically execute trades.
• Goldman Sachs is bringing its $100 billion flagship Treasury fund to Avalanche-based institutional network Lynq. The Goldman Sachs Financial Square Government Fund (FTIXX) will be available to Lynq participants, giving crypto trading firms a way to earn yield on idle cash while keeping it within their existing trading infrastructure. The fund itself is not being tokenized; instead, Lynq will record investors’ fund positions on its private, permissioned Avalanche L1.
• Hyperliquid co-founder Jeff Yan said 24/7 trading isn't the true differentiator for onchain finance. Speaking at Korea Blockchain Week, Yan argued that self-custody and transparency are the more enduring advantages. He also highlighted private markets as a major opportunity for onchain venues, arguing they could enable efficient price discovery for assets that are traditionally difficult to access.

Top of the Charts: Tokenized stock transfer volume is concentrated in some of the largest retail-facing issuers