Tokenizing Traditional Stocks: Securitize's Disruptive Onchain Model and Its Implications for the Future of Public Markets

The financial landscape is undergoing a seismic shift as blockchain technology redefines how traditional assets are structured, traded, and governed. At the forefront of this transformation is Securitize, a platform pioneering the tokenization of real-world assets (RWAs) with a focus on traditional stocks. By leveraging a hybrid compliance model, interoperable DeFi integration, and strategic institutional partnerships, Securitize is not only reshaping capital markets but also challenging the status quo of public equity trading. For institutional investors, this evolution presents a compelling case for strategic capital allocation in blockchain-enabled securities infrastructure.

Securitize's Onchain Model: Bridging Compliance and Innovation

Securitize's approach to tokenizing traditional stocks is rooted in regulatory alignment and technological interoperability. Unlike synthetic or derivative-based tokenization models, Securitize issues "real" shares onchain, ensuring that tokenized stocks retain full shareholder rights-dividends, proxy voting, and liquidity-while adhering to SEC regulations according to reports. This is achieved through a hybrid compliance framework: the blockchain acts as the authoritative record of ownership, while Securitize functions as an SEC-registered transfer agent, automating compliance checks via smart contracts as research shows.

The platform's dual trading mechanism further enhances its appeal. During U.S. market hours, tokenized stocks comply with National Best Bid and Offer (NBBO) rules, ensuring price discovery aligns with traditional markets. Outside trading hours, automated market maker (AMM)-style pricing mechanisms provide continuous liquidity, a feature absent in conventional stock markets according to analysis. This duality addresses a critical pain point for institutional investors: the need for 24/7 access to liquid, regulated assets.

Technologically, Securitize leverages Ethereum-based standards like ERC-1400 and ERC-3643, which enforce compliance logic such as transfer restrictions and ownership tracking according to technical documentation. These standards are critical for meeting legal requirements in both the U.S. and EU, where tokenized stocks are treated as traditional securities under frameworks like Reg D and MiFID II as legal experts note. By embedding compliance into the protocol layer, Securitize reduces operational overhead for issuers and investors alike.

Institutional Adoption: A Strategic Shift in Capital Allocation

The institutional appetite for blockchain-enabled securities has grown exponentially in 2025, driven by regulatory clarity and infrastructure maturity. 94% of institutional investors now view blockchain technology as a long-term value proposition, with 86% either holding digital assets or planning allocations in 2025 according to investor surveys. This shift is underscored by the rise of registered investment vehicles, such as spot Bitcoin and Ethereum ETFs, which have attracted over $115 billion in combined assets under management (AUM) by late 2025 as market data shows.

Securitize's institutional partnerships exemplify this trend. The platform has tokenized over $4 billion in assets, including BlackRock's BUIDL fund and KKR's Health Care Strategic Growth Fund II as reported. Notably, BlackRock's BUIDL fund, launched in 2024, offers institutional investors access to U.S. Treasuries and repurchase agreements with a yield of 3.77% APY, and it has grown to $2.5 billion in AUM as of November 2025 according to research findings. These partnerships highlight how tokenization is enabling fractional ownership and programmable compliance, reducing barriers to entry for both issuers and investors.

Securitize's strategic move to go public via a SPAC merger with Cantor Equity Partners II-valuing the company at $1.25 billion pre-money-further validates institutional confidence in its infrastructure as announced. The deal includes a $225 million private investment in public equity (PIPE) led by blue-chip investors and $244 million in cash from the SPAC's trust account, signaling strong capital backing for scaling tokenization adoption according to press releases.

Comparative Advantages: Blockchain vs. Traditional Finance

Blockchain-enabled securities infrastructure offers distinct advantages over traditional models, particularly in efficiency, transparency, and accessibility. For instance, tokenized assets settle in under 3 minutes, compared to the 2–5 business days required in traditional markets according to market analysis. This speed is critical for institutional investors seeking to optimize liquidity and reduce counterparty risk.

Cost efficiency is another differentiator. By automating compliance and settlement via smart contracts, blockchain reduces the need for intermediaries, cutting operational costs by up to 40% as industry experts observe. For example, Securitize's tokenized AAA CLO fund, launched in collaboration with BNY, brings structured credit products onchain, offering institutional investors programmable collateral management and real-time transparency according to company announcements.

Moreover, blockchain's global accessibility is reshaping cross-border capital flows. Platforms like Robinhood and Bitpanda now offer tokenized U.S. stocks to European customers, enabling 24/7 fractional trading and expanding market reach as legal frameworks permit. This contrasts sharply with traditional markets, where cross-border transactions are often hindered by regulatory silos and high fees.

Challenges and the Road Ahead

Despite its promise, blockchain-enabled securities infrastructure faces hurdles. Scalability remains a concern, as older blockchains like Ethereum struggle with transaction throughput according to technical assessments. Privacy issues also persist, as public ledgers can expose sensitive transaction data as security experts warn. However, regulatory frameworks like the EU's MiCA and the U.S. GENIUS Act are creating structured environments for innovation, balancing compliance with technological progress as policy analysts report.

For institutional investors, the key lies in strategic allocation to hybrid models that combine blockchain's efficiency with traditional market safeguards. As the tokenized stock market cap grows from $424 million in 2025 to a projected $1 trillion, the ability to navigate these challenges will determine long-term success according to market forecasts.

Conclusion

Securitize's onchain model represents a paradigm shift in how traditional stocks are tokenized, traded, and governed. By aligning with regulatory frameworks, leveraging interoperable DeFi protocols, and securing institutional partnerships, the platform is laying the groundwork for a future where blockchain and traditional finance coexist. For strategic capital allocators, the implications are clear: blockchain-enabled securities infrastructure is no longer a speculative experiment but a core component of diversified portfolios. As the $19 trillion tokenization market unfolds, early adopters stand to gain not only from efficiency and liquidity but also from the transformative potential of onchain finance as the company's leadership states.