Tokenizing Stocks: Why the Multi Trillion $ Shift Is Happening Now (Part 1 – Large Cap)

Since crypto’s boom back in 2017, the idea of tokenizing stocks has been floating around as the next "big thing." But for years, it’s mostly been vaporware—stuck behind messy regulation and immature infrastructure. Now, finally, things are shifting fast.

Why now? Bonds. Yeah, bonds. Boring as they sound, bonds are paving the way, rapidly becoming blockchain’s killer app in finance. And Larry Fink, CEO of BlackRock, isn’t just sitting on the sidelines—he’s betting big.

Take BlackRock’s BUIDL Fund. In no time, it’s grown to over $2.47 billion, making up a hefty slice of the $6.9 billion currently sitting in tokenized assets. This momentum isn’t slowing down anytime soon. ICODA’s recent report expects the tokenized bond market to hit $1 trillion by 2028. That’s not just hype—this is real, structural change.

Enter the GENIUS Act, freshly passed by the Senate with strong odds of clearing the House too. The act includes a critical provision—stablecoins can’t pay interest. Why is this big? Because if you’re holding stablecoins, bonds will become your go-to source for yield. Expect a surge in tokenized bonds as investors rush in.

But why stop at bonds? Once the rails are set up for bonds, stocks are an obvious next move.

Three huge reasons stocks will benefit from tokenization:

1. Liquidity and Market Access

You no longer need a full share of a high-priced stock like Amazon or Berkshire Hathaway—fractional ownership is seamless with tokenization. Smaller investors can jump in, unlocking more market liquidity. And with blockchain’s 24/7 trading, the market is always open. Kraken's recent move to offer tokenized U.S. stocks to global investors outside U.S. borders is a prime example of this shift.

2. Faster Settlement = More Capital

Today’s settlement times (T+2) lock up huge amounts of capital—globally, settlement failures alone cost markets roughly $96.6 billion annually. Tokenization pushes that timeline to near-instantaneous (T+0), freeing up billions of dollars. That’s massive capital instantly available for reinvestment.

3. Radical Transparency & Security

Blockchain means absolute transparency—no more murky ownership trails or compliance headaches. Everything’s recorded permanently. And the notorious issue of naked short selling? Gone. Blockchain's immutable records prevent traders from shorting stocks they don’t actually own, shutting down one of the market’s biggest loopholes.

Bottom line: Bonds have cracked open the door, and tokenized stocks are stepping through next. Infrastructure’s here, regulation’s aligning, and major players like BlackRock are already moving the needle.

In Part 2, we’ll dive into how this trend could transform startup investing—stay tuned.