The European Securities and Markets Authority (ESMA) has flagged rapid growth in tokenized equities while raising concerns about how these products are structured and traded. In its Trends, Risks and Vulnerabilities report for the first half of 2026, ESMA said the market capitalization of tokenized stocks climbed from about €300 million to nearly €1.9 billion over an 18-month period.
The regulator warned that issuing multiple tokenized versions of the same stock could split liquidity across venues and products. ESMA also said many of these offshore structures, while marketed as being backed 1:1 by shares, are effectively packaged securities. Ownership records for the underlying shares remain off-chain, meaning there is no single authoritative source on-chain.
The report also pointed to added complexity and risk from multi-layer intermediary arrangements. It added that many transactions still do not achieve true atomic settlement, where securities and cash are exchanged at the same time. ESMA said xStocks, Ondo Global Markets and Robinhood have all submitted prospectuses in the European Union for tokenized stock offerings.
According to Ledger Insights, the European Securities and Markets Authority (ESMA) recently published its Trends, Risks and Vulnerabilities report for the first half of 2026, with a dedicated section on tokenized stocks.
The report said the market capitalization of tokenized equities rose from about €300 million to nearly €1.9 billion over the past 18 months.
ESMA warns multiple versions of the same stock token could split liquidity
ESMA said that issuing different tokenized products for the same stock could fragment liquidity.
Report highlights offshore structures and settlement limits
According to the report, these offshore structures are marketed as being backed 1:1 by shares, but in substance they are packaged securities. Records of ownership for the underlying shares are kept off-chain, and there is no single source of truth on-chain.
ESMA also said multi-layer intermediary arrangements add complexity and risk. Many trades, it noted, still do not achieve true atomic settlement, meaning securities and cash are not exchanged simultaneously.
Three firms have filed prospectuses in the EU
ESMA said xStocks, Ondo Global Markets and Robinhood have each submitted prospectuses in the European Union related to tokenized stocks.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
