Stock Exchanges Call for Crackdown on “Tokenised Stocks” | News Glare

August 25, 2025 - LONDON (Reuters) - A coalition representing the world’s largest stock exchanges has urged securities regulators to impose tighter controls on so-called “tokenised stocks,” warning that these blockchain-based tokens pose new risks for investors and could undermine market integrity.

In a letter to global regulators, the World Federation of Exchanges (WFE) expressed concern that tokenised equities, which purport to mirror share ownership, do not confer the same shareholder rights or protections as traditional listed securities. Major crypto trading platforms such as Coinbase and Robinhood have begun offering these digital tokens, which backers say can reduce trading costs, speed up settlement and enable 24/7 trading.

“We are worried that a growing number of brokers and crypto-trading platforms are marketing tokenised U.S. stocks as equivalent to the real thing, yet these tokens fail to satisfy fundamental legal standards of equity ownership,” WFE CEO Nandini Sukumar said. “Regulators must ensure that tokenised assets comply fully with existing securities laws, clarify legal frameworks for custody and prevent misleading marketing.”

Issuing companies-whose shares are being replicated by token issuers-could face reputational damage if tokens fail to perform as expected, the WFE warned. Unlike conventional stocks, token owners do not gain rights to dividends, voting or corporate actions, yet some offerings are promoted on the premise that they do.

The WFE called on regulators to:

Treat tokenised equities as securities under current rules and require issuers and trading platforms to register accordingly.
Establish clear legal definitions for ownership, custody and transfer of tokenised assets.
Prohibit marketing that suggests tokenised stocks are identical to traditional shares.

An SEC commissioner reiterated in July that tokenised securities remain subject to U.S. securities regulations. Robinhood launched tokenised equities in its EU business in June, and Coinbase is seeking SEC approval to roll out a similar product in the U.S.

The WFE’s appeal underscores growing unease among traditional market operators about the rapid convergence of blockchain technology and conventional equity trading. As tokenised markets expand, regulators face the challenge of balancing innovation with investor protection.