Tokenized Stocks Face Limitations Amid Growing Market Potential
Tokenized stocks currently offer a subpar experience compared to traditional markets, facing numerous restrictions and limitations:
- Available services mostly in the E.U., with limited access for U.S. users.
- Trading is limited to five days a week, despite 24-hour availability.
- Geographic restrictions and KYC requirements hinder transfers.
- Many tokens lack voting rights and do not permit dividends or use in DeFi services.
Future improvements are anticipated as regulatory clarity increases and KYC processes standardize, leading to:
- Interoperable liquidity pools enhancing market depth.
- Potential inclusion of voting rights and automated tax withholding.
- Integration of on-chain assets into DeFi services for collateral and lending.
Recent developments, such as Robinhood's Layer-2 network on Ethereum, promise expanded access to private companies. The potential for enhanced corporate governance through smart contracts could also revolutionize shareholder participation.
The transition from early adoption to mainstream acceptance may significantly increase the market size of tokenized assets, potentially connecting $200 trillion in stocks and bonds to blockchain technology.