Tokenization of Securities on Blockchain: xStocks Product Analysis and Future Outlook

At the end of June 2025, several well-known cryptocurrency exchanges announced the launch of the xStocks product provided by a Swiss compliant asset tokenization platform. This is a series of tokens backed 1:1 by real stocks, with the underlying assets held by regulated third-party custodians. These tokens are issued under the SPL standard on the Solana public chain, supporting round-the-clock trading and on-chain instant settlement, breaking the time and space limitations of traditional stock markets. Currently, this product is only available to non-U.S. users.

Project Background

The three co-founders of the project previously had experience with blockchain projects. In 2021, inspired by the application of stablecoins, they founded a company dedicated to bringing traditional assets onto the blockchain in a compliant manner. After more than two years of development, the project has completed feasibility verification, financing, and collaboration with financial institutions, and the related product prospectus has received regulatory approval from the EU. After the first batch of products launched in 2023, the cumulative issuance scale exceeded $50 million. In April 2024, the company completed $9.5 million in Series A financing.

Product System

The platform currently offers on-chain tokenized securities services covering global blue-chip stocks, index funds, and short-term bonds through its two major product lines, xStocks and bTokens. All tokens are backed by a 1:1 physical asset and have an ISIN number approved by EU compliance. The products have been issued on multiple mainstream public chains and integrated with various DeFi protocols, supporting on-chain strategy deployment such as lending, market making, arbitrage, and more.

Industry analysts point out that the xStocks token is essentially a debt structure, not an equity token. This design allows the token to be freely transferred on-chain like a stablecoin, avoiding the complex procedures and tax issues associated with equity transfers.

Current Trading Status

Despite support from major trading platforms, the actual trading activity of xStocks remains highly concentrated on a few popular assets. On the first day of launch, the on-chain trading volume was $1,338,000, with 1,225 independent trading users; on the second day, trading activity significantly increased, with a trading volume of $6,640,000 and over 6,500 new independent trading users. However, on-chain trading for most assets is extremely limited, and liquidity issues are common.

In addition to on-chain transactions, xStocks can also be traded through internal matching on the exchange, but it similarly faces the issue of insufficient liquidity. Overall, users experience low transaction efficiency and limited market depth, resulting in a significant gap in trading experience compared to traditional contract for difference platforms.

Product Advantages and Target Audience

The xStocks model primarily serves non-US users who find it difficult to access US stocks through traditional brokers, especially native crypto users. Its advantages include: support for stablecoin payments and small transactions, no need for a US stock account, round-the-clock on-chain matching and settlement, real asset custody, and compliance with EU regulations.

Future Development Direction

Although xStocks provides the infrastructure for on-chain investment in US stocks, liquidity bottlenecks in the spot market still exist. As a result, the industry has begun to focus on more trading-oriented derivatives paths, particularly perpetual contracts for stocks. These products do not require actual stock delivery and can rely on oracle prices and funding rate mechanisms to achieve pure on-chain trading. The technical path is mature and suitable for priority deployment on decentralized platforms.

Another direction worth noting is the tokenization of equity in unlisted companies. On-chain issuance of transferable equity tokens, combined with mechanisms such as DAO governance, contract locking, and qualified investor thresholds, is expected to achieve an efficient and transparent structure for early equity circulation. However, this path still faces challenges such as regulatory uncertainty and complex issuance structures.

Summary

xStocks provides a realistic path for the compliant tokenization of assets, demonstrating strong product design capabilities. However, the liquidity of the spot model is limited, and the ability to expand its user base is insufficient, which determines its difficulty in independently supporting the growth of the tokenized stock market. In the future, breakthroughs around the combination of perpetual derivatives and early equity tokenization may become key to driving the on-chain securities market from "tool-type products" to "trading-type assets."