Original｜Odaily Planet Daily（@OdailyChina）
Organized｜Wenser（@wenser2010）
In the past two weeks, the wave of securities tokenization has gained momentum, with several mainstream crypto exchanges launching blue-chip US stock token trading services one after another.
At this pivotal moment, Odaily Planet Daily successfully held an online Space on Wednesday titled "The Wave of Securities Tokenization is Coming: 1 U can buy Apple and Nvidia stocks, Revolution or Bubble?" Inviting trading platforms such as MyStonks, Bybit & Byreal, GoRich, and well-known crypto KOLs, the discussion delved into key issues surrounding securities tokenization from the perspectives of platform operation and user experience.
Guest List:MyStonks Founder Bruce, Bybit Spot Head & Byreal Founder Emily, Bit.com GoRich Business Head Raymond, Crypto KOL "Bitcoin Factory Chief," and Crypto KOL "Kailin."
This discussion focused on core industry concerns, producing many insights on platform compliance operation points, differentiated competition paths for exchanges, and sources of user returns and risks. Odaily has specially selected the core viewpoints summarized below for readers' reference.
Q1. A few years ago, the crypto market attempted US stock tokenization (Mirror Protocol, FTX), but it did not create significant waves. Now, securities tokenization has become a hot topic again. How do the guests evaluate this? What is their view on the market prospects for securities tokenization?
MyStonks Founder Bruce: Personally, I believe that this change is closely related to the improvement of the regulatory environment. During the Democratic Party's administration in the US, the SEC's attitude towards crypto was extremely unfriendly, but after the presidential transition to the Republican Party, the door has opened for the development of the cryptocurrency industry. Secondly, the overall scale of crypto users is continuously increasing. To date, the number of crypto users in the US has surpassed 60 million, and globally, it exceeds 800 million. These users are very attractive to any market, not just the US securities market, but also the financial markets of any country. Therefore, the push for securities tokenization in the US, especially on Wall Street, is a major trend, and it can even be understood as a national policy of the US or a strategic direction of Wall Street. For us, this is a significant opportunity for a transformation of the entire industry.
Bybit Spot Head, Byreal Founder Emily: Previously, the main reason was that the earlier protocols or products lacked compliance and market depth support. Especially in the market environment at that time, liquidity was relatively good, and there were many options available, so the securities tokenization platforms failed to survive the cycle and make it to the present. Now, the trend of Internet Capital Market Onchain, that is, securities tokenization and US stock tokenization, is gradually emerging. This is a new development after the concept validation (POC) of the previous cycle. The market environment, compliance policies, user demands, and DeFi Infra underlying technologies have all greatly improved. Looking at the future from the present, it is clear that this is not merely a concept hype, but a release of structural demand. This trend has actually been in place since the approval of the Bitcoin spot ETF at the beginning of last year, and it is only now that mature platforms and products like xStocks and MyStonks have emerged. After a long period of construction and compliance review, including Robinhood's proactive moves, it is evident that there is real demand, which is also the feedback we receive from many real users.
The launch of Byreal is also aimed at combining the deep liquidity of centralized CeFi with the transparency innovation of DEX, providing the market with richer investment choices.
Bit.com GoRich Business Head Raymond: Previous US stock tokenization products were more like derivatives of US stocks. Of course, the subsequent collapse of FTX exposed the conflict between on-chain transparency and compliance issues. From a technical perspective, the previous oracles or on-chain asset custody and risk control mechanisms were not mature enough to maintain a relatively stable price system and some clearing mechanisms; and the RWA infrastructure at that time cannot be compared to what we have now. Therefore, my view is that US stock tokenization may not be an explosive revolution, but rather a gradual evolution of financial infrastructure. Externally, users from any country can invest in US stocks; internally, Hong Kong has recently provided some regulatory support, and in the future, it may even allow investors to gradually trade US stocks directly with RMB.
Moreover, it is worth noting that the "coin-stock linkage effect" has always been a market focus. For example, in the past two years, when US stocks surged before the market opened, it would also drive up the BTC market. In a situation where market funds are abundant, users can adopt a strategy of catching up; if market funds are relatively insufficient, users can also place bets in advance based on fund flows. For instance, if US stocks hit the limit up, BTC might drop, leading to a reverse judgment. In the short term, the compliance costs of securities tokenization are very high, and the current on-chain trading depth is generally average, so it will exist in a supplementary rather than a substitutive role. In the future, if liquidity depth is sufficient, securities tokenization will reduce the asset issuance or user trading costs, allowing global investors to participate and facilitating convenient and diversified investments. This is also the direction GoRich is striving for.
Crypto KOL Bitcoin Factory Chief: First of all, US stock tokenization has attracted a large number of traditional financial industry professionals, forcing them to pay attention and learn, which is undoubtedly a positive for the crypto industry. The previous failure of FTX's synthetic assets was more due to the high-pressure restrictions from regulators. With Wall Street entering the cryptocurrency industry and Trump's crypto-friendly attitude, traditional financial investors have gradually entered this circle, creating such demand. Additionally, compared to the time-limited traditional financial market, 24/7 trading will greatly facilitate investors. Furthermore, regarding subscription thresholds, unlike the stock market's minimum purchase of one share, securities tokenization has fragmented stocks, allowing users to buy corresponding tokens for as little as 0.01 shares. Foreign exchange controls have also been one of the reasons limiting users' access to the US stock market, while securities tokenization essentially opens up investment to the global market.
Of course, there are still differences between the two, such as voting rights and dividend distributions of traditional stocks; after tokenization, there may only be economic rights without other rights. Nevertheless, this is a major trend, and the potential user scale in the industry is at least tenfold. This is also one of the reasons why many A-shares and H-shares listed companies have been reaching out to me. The main question they ask is how to buy Bitcoin, wanting to emulate companies like Strategy to boost their stock prices or to hold Bitcoin long-term.
Crypto KOL Kailin: I personally pay more attention to the AI field, especially the Virtuals ecosystem. I have noticed that several projects I recently invested in have started to bind with RWA or securities tokenization, which was rare before. Now, there is a project using AI to manage user funds, doing compliant user deposits and withdrawals in Southeast Asia, which is a quite imaginative track worth long-term attention.
Q2. Many people view securities tokenization as the "Trojan Horse" for traditional financial markets to enter the crypto market, believing it will further compress the liquidity and trading space of altcoins. How do you view this perspective?
MyStonks Founder Bruce: I think this statement is inaccurate. First, recently, US publicly listed companies have been purchasing BTC, ETH, BNB, SOL, and other mainstream coins. Even without securities tokenization, the liquidity of altcoins is already declining. Second, securities tokenization will promote the expansion of the crypto market scale. Compared to the crypto market's market cap of less than $4 trillion, the overall market cap of US stocks is $36 trillion, not counting US Treasury bonds. After securities tokenization, those investors who are not interested in investing in altcoins may very well turn to invest in US stocks, Nikkei, Middle Eastern stocks, or even Hong Kong stocks. Third, the demand for most users trading altcoins is actually about getting rich quickly, but traditional markets like US stocks and Nikkei also have many opportunities for wealth creation, which can even rival altcoins.
Bybit Spot Head, Byreal Founder Emily: I agree with Bruce's viewpoint; the liquidity of altcoins is indeed somewhat powerless to be compressed. Because funds will always flow to places with higher profit effects. For trading users who want to make money, if they have the opportunity to enjoy higher investment returns in the stock market, many will choose such investment targets instead of just trading altcoins or chasing airdrops. As a trading platform, our goal is to be the first to introduce similar assets to the platform while providing better trading services. Therefore, securities tokenization acts more like a bridge, bringing traditional financial funds and liquidity into the crypto market.
Bit.com GoRich Business Head Raymond: From the perspective of user attributes, every wave of industry trends creates a group of people who make money, and many of them develop path dependence from this. That’s why we previously saw people getting rich from DeFi, GameFi, NFT, and other trends. But there is also a group of people who are more flexible, making money from whatever is hot. They earn early Alpha returns. After the start of securities tokenization, perhaps a third type of group will emerge—those with a preference for more stable funds, inclined to buy more transparent and compliant assets. This group may include newcomers to the crypto space or veterans looking to diversify their positions. Thus, the trading activity of mid-tier altcoins will decline again, and many tokens on exchanges, especially those without real use cases, may gradually head towards extinction, forming a "dumbbell" market: one side consists of stable mainstream coin assets or compliant assets; the other side consists of meme coins with wealth creation potential; and the rest will be the gradually diminishing tokens, especially some VC coins or "girlfriend coins."
Crypto KOL Bitcoin Factory Chief: This is more of a two-way penetration; it can be said that traditional finance is invading the crypto space, and it can also be viewed as the crypto space retrofitting the traditional financial market. In the past two years, brokerages, private equity funds, public funds, and some fund managers have been gravitating towards the cryptocurrency industry, just like Jack Ma said: "If the banks don't change, we will!" To some extent, the crypto space is actually forcing traditional finance to change. In the short term, it will definitely put pressure on altcoins, but in the long run, it will eliminate some low-quality projects and consolidate the value of failing crypto projects; moreover, it significantly lowers the entry barrier for people from traditional finance to enter the crypto space. Additionally, Morgan Stanley predicts that the securities tokenization market is expected to exceed $100 billion in the future, and the resulting on-chain demand, including clearing, lending, and derivatives, may create new ecological niches for altcoins. This includes the possibility of using smart contracts for automatic dividend distribution and cross-protocol yield, which are all transformations of cryptocurrency in the traditional financial sector.
Crypto KOL Kailin: In the early stages of the track, it will definitely siphon off from other tracks; however, securities tokenization will certainly attract a group of traditional finance people, and then gradually develop vertically. As for other tracks, there will be short-term impacts, but in the medium to long term, I think the impact will be minimal. For example, I personally focus mainly on the AI track. If a new track becomes particularly hot, I will first look for intersection opportunities between the new track and my area of focus, then invest some funds to validate and experiment, but in the long run, I will still concentrate on my main track. The impact is not significant because, for investors, it is essentially about running multiple horses together; it just depends on which investment target is performing better.
Q3. Previously, Robinhood announced the launch of equity tokenization assets for unlisted companies like OpenAI and SpaceX, which sparked controversy. How do the guests view this behavior? Will it bring regulatory pressure? Are companies also considering launching tokens for some unicorn companies?
MyStonks Founder Bruce: Speaking of this, Robinhood is actually a very cunning company. Many people may not realize that this company is fined by US regulatory agencies every year, but they don't care, including this time when they launched equity tokens for OpenAI and SpaceX.
From our perspective, Robinhood is not qualified to do this because it should be OpenAI or SpaceX themselves doing it. But why did they launch both at the same time? They actually took advantage of the discord between Sam Altman of OpenAI and Elon Musk of SpaceX. They predicted that by launching equity tokens for these two companies, one of them would definitely come out with a statement opposing it, and the result was that OpenAI stated it does not recognize Robinhood's equity tokens and has nothing to do with them. Then, Musk indeed came out to support Robinhood (referring to Musk's post mocking OpenAI's non-existence of equity), but of course, he did not support Robinhood issuing equity tokens; he was just using this to satirize Sam personally.
From a business perspective, this is quite clever; however, from a regulatory standpoint, they will definitely face pressure. Although the SEC's current regulatory policy is quite open, strictly speaking, Robinhood is still not qualified to do this (referring to issuing equity tokens for unlisted companies).
As for whether MyStonks will launch similar unicorn company equity tokens in the future, as a trading platform, MyStonks tends to support trading rather than so-called "helping this company issue equity tokens," which is definitely non-compliant and unreasonable.
Bybit Spot Head, Byreal Founder Emily: From this perspective, Robinhood is also quite ambitious. I personally believe that from a broader perspective, there may be unicorn equity tokens in the future, or direct on-chain IPOs are also possible. For instance, Solana also formally submitted a document to the US SEC earlier this year called Project Open (Note from Odaily Planet Daily: This refers to a new proposal submitted by the Solana Policy Institute in collaboration with partners to authorize the issuance and trading of traditional securities on public blockchains like Solana), and currently, the SEC has not issued a rejection letter, so future exploration in this area is still very possible, of course, it must be conducted within a compliance framework.
Bit.com GoRich Business Head Raymond: In fact, equity tokens for unicorn companies carry many risks, such as trading restrictions, authorization credibility, and how to ensure that on-chain tokens have a mapping relationship with real private equity, or challenges in trust and auditing. However, GoRich views this market as an attention economy game, so once the timing and conditions are right, we will quickly follow up with some private original equity proxies for unicorn companies, and of course, we will also conduct thorough screening. As we are a trading intermediary or trading aggregator, after due diligence is completed, we will respond promptly to market hotspots. In the future, whether it is Robinhood or other on-chain IPO platforms, once a platform with potential or depth emerges, we will definitely follow up quickly.
Crypto KOL Bitcoin Factory Chief: I personally believe that, at present, tokenized securities products can be classified according to different risk levels. For example, platforms like xStocks and MyStonks are launching equity tokens for well-known companies like Apple, Nvidia, and Tesla, which have relatively manageable liquidity and regulatory resistance; whereas Robinhood's launch of equity for unlisted companies naturally carries the highest risk factor, which may attract retail investors more due to potentially high returns, but there are also legal risks; while the yield rights of bond funds under Goldman Sachs have a relatively medium risk level because they do not involve changes in ownership, thus having a higher degree of compliance. To some extent, launching equity tokens for unlisted companies disrupts the traditional IPO logic, but it also carries risks such as OpenAI not recognizing the equity, forced redemption of tokens, or trading suspension. Robinhood's attempt can be seen as an aggressive experiment, but overall, it is still a good thing.
Crypto KOL Kailin: I somewhat agree with Emily's viewpoint; in the short term, it will bring a certain amount of traffic and attention, but in the long term, the opaque asset packaging methods and regulatory risks are very real.
Q4. Currently, there are two types of securities tokenization: the first is to launch spot and derivatives based on stock market data, and the second is 1:1 pegging, backed by real "real stock-like asset reserves." How do you view these two methods? What are their advantages and disadvantages? (If the launched assets are real stock assets, will the platform provide transparency statements, verification methods, and audit reports?)
MyStonks Founder Bruce: Indeed, one of the market solutions is like xStocks' on-chain MM building pools on Solana Raydium, but for users, one issue is high slippage, and the other is that trading times cannot be determined. MyStonks currently adopts a 1:1 pegging method, using an order book model, which means there must be proof of asset reserves. On-chain, this involves security audits in the crypto industry; off-chain, it involves independent auditing firms auditing the actual stocks held by our partners and the stocks we actually custody. We are conducting both audits, and we already released an audit report during the first token issuance, with monthly updates to follow.
Bybit Spot Head, Byreal Founder Emily: Bybit currently has opened a platform entry, which is equivalent to a sub-section, allowing users to directly use stablecoins for deposits, supporting trading in gold, commodities, and US stocks. Currently, it is using a CFD model, with price anchoring achieved through oracles like Chainlink, which makes it easier to avoid the attributes of securities in terms of compliance. Additionally, for financial innovation technology, asset rights confirmation is a very important matter, so we chose to cooperate with xStocks, whose audit compliance is relatively comprehensive. Furthermore, xStocks' advantage is that it is not affected by US stock market closures; during market closures, it will use pre-market and after-hours prices for anchoring, and more market makers will join in the future, leading to improved market liquidity and trading experience.
Bit.com GoRich Business Head Raymond: Currently, we have launched stock trading based on xStocks and Backed on Base, and we are actively engaging with Coinbase and Robinhood. Because the trading volume of US stock tokens is currently too erratic, with many instances of price manipulation, there are a few users who may manipulate liquidity pools. Robinhood's handling of this is quite experienced, as they use a 5×24 hour mechanism instead of 7×24 hours, so GoRich will also follow corresponding compliance requirements. Therefore, GoRich is currently quite conservative in risk exposure management, trying to minimize the possibility of unexpected situations and avoid users losing all their assets.
Crypto KOL Bitcoin Factory Chief: I believe that synthetic assets are more suitable for crypto users because they pursue high risk, high returns, or high capital turnover efficiency, but conversely, they also need to bear what is called systemic risk; while physical assets, with 1:1 pegging and relative transparency, are more favored by mainstream institutions because they basically solve compliance and redemption flexibility issues. The two will coexist in the future.
Q5. Traditional stock markets have trading halts, while crypto operates 24/7. How can we avoid decoupling of tokenized securities assets during trading halts? What are the good solutions from various companies?
MyStonks Founder Bruce: To be honest, MyStonks currently does not have a good solution. Two months ago, we discussed whether to build a liquidity pool on Uniswap, but later, due to internal compliance considerations, we felt we couldn't do that. Although there is an opportunity to be the first to try, the first one to try might also get pinched by the crab. As Chinese entrepreneurs, we tend to follow a strategy of observation; we want to see how the foreigners do it and what the response from the US SEC will be before we proceed with our own plans. Although the current SEC has a good regulatory attitude, with SEC Chairman Paul Altkins even publicly stating, "If it can be done, it can be done. If it can be regulated, we won't regulate it," the risk of price decoupling still exists, and we are working hard to find better solutions.
Bybit Spot Head, Byreal Founder Emily: Bybit has indeed introduced external market makers to provide liquidity, but in the initial stages, it is clear that the liquidity is not particularly good, especially with our first US stock token CoinX, which experienced price manipulation. This is indeed unavoidable. However, the other nine tokens launched later have improved significantly because the market-making strategy is continuously being adjusted. For trading halts, the current solution is to monitor price differences through strong monitoring measures; we are also considering introducing a multi-oracle system on-chain and combining CeFi and DeFi for market-making to ensure market liquidity. We expect new developments by the end of the month, so everyone can look forward to it.
Bit.com GoRich Business Head Raymond: Currently, GoRich has completed the aggregation of pools for US stock tokens. In addition, we will set up an automatic reminder mechanism for users when trading highly volatile tokens, such as reminding users of excessive slippage or significant principal loss. As a trading aggregator, GoRich hopes to promote a trading philosophy to users, changing some ordinary users' incorrect trading habits. We also provide platform features, such as automatically selling when the price increases by 30% or 100%, hoping that users can make some money while ensuring they do not lose their principal in the high-intensity and high-risk crypto space.
Q6. Regarding entry thresholds, will companies restrict platform user participation qualifications or have other KYC and trading thresholds?
MyStonks Founder Bruce: Although more people in the crypto industry hope to eliminate KYC policies to achieve true decentralization, MyStonks still needs to comply with relevant US laws, and we are also working hard on the STO application (Note from Odaily Planet Daily: referring to the securities token issuance license).
Bybit Spot Head, Byreal Founder Emily: First of all, all information can be found in our terms and conditions. There are restrictions for users from certain high-risk jurisdictions. Additionally, the US stock token spot for xStocks is located in our innovation zone, and there are certain limits on users' position sizes. Of course, this is not an entry threshold; it is more set for the purpose of protecting user assets.
Bit.com GoRich Business Head Raymond: GoRich has always insisted on compliance work globally, meeting local requirements, and the vast majority of new and old users can trade US stocks like Apple and Nvidia for as little as $1.
Conclusion: Moving Forward in Exploration, Securities Tokenization Has Become a Foregone Conclusion
From the guests' speeches, it is clear that despite still facing risks such as unclear regulations, price decoupling, and the need for improved market-making mechanisms, securities tokenization has indeed become an important direction for asset issuance reform. In the future, on-chain IPOs and unicorn company equity tokenization will also become possible. The feast belonging to the cryptocurrency industry still holds great promise for the future.
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