What is the Tokenization of US Stocks? Could it Ignite a Bull Market?
01 What is 'Tokenization of US Stocks'?
It refers to expressing the ownership or price yield of traditional stocks in the form of tokens on the blockchain, allowing users to trade 'US stocks' like cryptocurrency assets, 24/7.
In simple terms, following the stablecoin approach: stablecoins are tokens issued in equal amounts for purchasing US Treasury bonds or dollars; stock tokens are tokens issued in equal amounts for purchasing stocks.
02 The specific operation of US stock tokens can be divided into four steps.
Step 1: The platform buys real stocks and ETFs: Apple, Google, Microsoft, Tesla, Nvidia, S&P, Nasdaq...
Step 2: The stocks and ETFs are entrusted to a custodian, with Bybit and Kraken in Jersey, UK, and Robinhood self-custody.
Step 3: Issue tokens corresponding to the number of stocks and ETFs at a 1:1 ratio: Apple tokens, Google tokens, Microsoft tokens, Tesla tokens, Nvidia tokens, S&P tokens, Nasdaq tokens.
Step 4: Crypto players buy and sell US stock tokens.
03 Advantages of US Stock Tokens
You might ask, isn't it better to trade US stocks directly? What are the advantages of US stock tokens?
Here are a few points:
The minimum unit of traditional US stock trading is 1 share; after tokenization, it can be infinitely divided. If you can't afford $200 for Apple, you can definitely afford $2.
The crypto market operates 24/7, allowing trading at any time.
The regulations in the crypto space are more relaxed, with tenfold or hundredfold contracts available, which are much more exciting than 3X Nasdaq ETFs.
US stock tokens can be used for staking and lending, and can participate in airdrops and new offerings to enhance returns.
The trading threshold is low, with multiple ways to play, and you can leverage easily, which increases the chances of significant gains.
If the tokens are priced at a premium, there might even be opportunities for arbitrage between US stocks and tokens.
04 Trading Crypto and Stocks is One and the Same
Currently, US regulators have not approved US stock tokens, so platforms cannot serve US customers.
Non-US customers face no restrictions; individuals from mainland China can also participate.
Platforms distribute US stock dividends through stablecoins.
Voting rights are exercised collectively by the platform.
Tax implications are relatively unclear; it is speculated that it may not be affected by CRS global tax tracking for the time being.
Thus, US stocks officially integrate into the crypto space, and trading crypto and stocks is one and the same.
A historic moment.