TD Cowen Expects Limited Demand for Tokenized Stocks — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- SEC launched a five-year Innovation Exemption letting tokenized stock venues run automated market maker pools without registering as exchanges, a week after broader crypto legislation (the Clarity Act) stalled.
- TD Cowen expects limited near-term adoption among retail and institutional investors, with VP Reid Noch writing that U.S. investors already have efficient stock access and tokenized venues need a compelling benefit to draw them in.
- SEC's AMM-based framework enables round-the-clock tokenized stock trading, but Noch warned thin liquidity in those pools produces poor prices.
- SEC imposed tight guardrails: tokens must represent NMS stocks preserving dividends, voting rights, and liquidation rights, third-party tokenizers must notify issuers with a 30-day objection window, and trading volume is capped.
- TD Cowen found minimal issuer interest after speaking with dozens of companies, naming Figure as one of the few crypto-adjacent firms actively tokenizing its stock.
- Figure's dual-listed structure illustrates the gap — 99.9% of its notional trading over a 24-hour window hit Nasdaq-listed FIGR shares rather than blockchain-native FGRS tokens carrying the same economic exposure.
- Perpetual futures dominate crypto-based stock exposure, accounting for 96% of Nvidia-related notional volume on Binance versus 4% for spot products, per TD Cowen.
Why it matters: TD Cowen's analysis undercuts the SEC's bid to mainstream tokenized U.S. stocks: with issuers uninterested and 99.9% of Figure's volume staying in traditional shares, the five-year framework risks becoming a regulatory milestone without meaningful market share. Meanwhile, perpetual futures — not tokenized spot products — are where crypto traders are actually placing stock bets, including 96% of Nvidia-related Binance volume.
Ask SkimNews
