Tokenized-stock markets are entering a more serious policy phase after research warned that allowing third parties to list tokenized equities could fracture liquidity and revenue across financial venues. Tiger Research director Ryan Yoon framed the issue as a structural threat for traditional finance because trading that once concentrated on venues such as the NYSE or Nasdaq could disperse across blockchains and decentralized platforms. The concern is not tokenization itself, but whether duplicated versions of the same stock weaken price discovery, execution quality and exchange economics for investors and venues.
— Tiger Research (@tiger_research_) May 22, 2026
The warning centers first on liquidity. If multiple platforms tokenize the same listed equity across different networks, order flow may split into smaller pools rather than gathering in one deep market. That can create price differences across venues, raise slippage for large trades and reduce overall market efficiency. Maja Vujinovic of FG Nexus also cautioned that disconnected pools could create tracking errors and shadow-shorting vulnerabilities when there are not enough localized buyers to stabilize a token’s price. Fragmented liquidity can turn accessibility into market weakness if scale arrives before coordination across venues.
Revenue Fragmentation Meets Tokenization’s Upside
Revenue fragmentation is the second risk. As tokenized stocks trade across disaggregated platforms, financial revenues that might have accrued to domestic exchanges could move offshore, creating direct implications for national competitiveness. The concern is already moving beyond theory as real-world asset open interest on Hyperliquid reached an all-time high of $2.6 billion this week, while tokenized stocks represent only 4.4% of total RWA onchain value. The market is still small but strategically sensitive, because early infrastructure choices may shape where future trading income settles next. Yoon called it a deep strategic dilemma for institutions and regulators.
The policy backdrop remains unsettled. The SEC’s innovation exemption, announced Monday, would allow third-party exchanges to list tokenized stocks without issuer approval, but Commissioner Hester Peirce said any exemption would be limited to digital representations of the same underlying equity investors can already buy in secondary markets. The full scope is not finalized. Advocates point to faster settlement, fractional ownership, lower costs, round-the-clock trading and better access for non-US investors. The unresolved question is whether tokenized equities modernize markets or atomize them, pushing regulators and incumbents to balance efficiency, access and centralized market integrity before fragmented models harden.
