Stablecoins Surge 99% Revenue Growth While Stock Tokens Struggle

The tokenization of real-world assets is experiencing significant growth, with stablecoins and stock tokens emerging as key players. Stablecoins, such as USD Coin (USDC), have successfully digitized fiat currency, creating a lucrative issuance model that has propelled them into a massive market exceeding $250 billion. In contrast, stock tokens, which aim to tokenize equities, face unanswered questions about who profits from their issuance, hindering their widespread adoption.

This disparity is evident in the financial models of both asset classes. Stablecoin issuers have unlocked a revenue engine by investing reserve assets, generating billions in profits. For instance, Circle earned over 99% of its 2024 revenue from interest on USDC reserves, while Tether (USDT) generated roughly $14 billion in profits by holding billions in Treasury bills. Tokenized stocks, however, lack this guaranteed yield, as platforms holding underlying shares gain no direct financial benefit. Dividends must pass directly to token holders, and stock lending is an uncertain and limited revenue source. Trading fees might not be enough, especially if investors prefer buying and holding long-term.

Despite the hype surrounding tokenized stocks, their uptake remains modest. Regulatory challenges, such as the need for brokerage licenses and regulatory approval, add complexity and limit who can issue or trade these tokens. For example, Binance halted its stock tokens after global regulators warned it was operating without proper authorization. Additionally, the economics for issuers are not as compelling as they are for stablecoins, further slowing their growth.

The push to tokenize stocks is gaining momentum amid the broader boom in real-world asset (RWA) tokenization. The total value of tokenized real-world assets has surged in recent years, with much of this growth coming from tokenized private credit and U.S. Treasury assets. Tokenized stocks, however, account for under $400 million, highlighting that although interest in RWA tokenization is rising, equity tokens are still a tiny sliver of the market.

Robinhood's foray into tokenized stocks is a prime example of this trend. The popular brokerage is now offering zero-commission, 24/5 trading of U.S. stock tokens to European investors. These tokens trade around the clock on weekdays, expanding access across borders. Robinhood touts full dividend support as well, promising that stock token holders will receive any payouts just like real shareholders. Other crypto firms have also dabbled in this arena, with Gemini offering a tokenized MicroStrategy stock (MSTR) for its users.

The road ahead for stock tokens remains uncertain. Real-world asset tokenization is often heralded as a bridge between traditional finance and crypto, and there’s good reason for excitement. Stablecoins have already proven that bringing off-chain assets on-chain can unlock enormous value and utility, effectively becoming the backbone of crypto trading. Tokenized stocks extend that vision, offering 24/7 globally accessible equity markets, fractional shares for all, and seamless settlement on a blockchain. The appeal for investors is clear, but for this vision to fully materialize, the incentives for token issuers must be aligned.

Currently, a stablecoin issuer gains a financial windfall from every token minted, thanks to reserve yields, whereas a stock token issuer gets comparatively little upside for providing the service. Until a sustainable business model emerges, whether through novel fee structures, participation in on-chain lending markets, or other innovations making the issuance more affordable, stock token offerings may remain limited in scale and number. For now, the contrast is stark: stablecoins thrive because their issuers profit handsomely from them, while tokenized stock issuers are still figuring out how to make the economics work. This fundamental difference, not technology or regulation, will determine how quickly RWA stock tokens catch up to their stablecoin cousins in the crypto economy. The concept of stock tokenization is undeniably promising, but until the question of “who gains and how” is resolved, its path to mainstream adoption will remain cautious and uncertain.