Unlike traditional stock ownership, these digital tokens don’t provide shareholder rights such as voting power or dividends. Yet, the WFE argues they are often marketed as though they do. That mismatch, the group warned, could mislead retail buyers into believing they hold genuine equity stakes.
If such instruments collapse, the reputational damage could spill onto listed companies themselves — undermining confidence in the broader financial system.
In letters sent to regulators including the SEC, ESMA, and IOSCO, the WFE called for securities laws to be updated to cover tokenized assets. The body suggested clearer rules on custody, disclosure, and promotion, and urged that these products not be advertised as “stock equivalents.”
Tokenized equities remain a niche sector, with RWA.xyz estimating about $360 million in value. Still, adoption is accelerating as platforms like Robinhood, Kraken, and Gemini experiment with blockchain-based stock exposure.
Bullish forecasts remain: Binance Research has speculated the market could eventually top $1.3 trillion if just 1% of global equities moved onto blockchains. For now, though, the debate is less about scale and more about safeguards — and whether investor trust can survive without them.
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