A tokenised stock is a digital token, usually issued on a blockchain, that represents a real share held somewhere else. Buy the token and you hold a claim on the share, not the share itself.
**How it works.** A firm buys the actual stock and keeps it in custody. It then issues one token for each share it holds. The tokens can be traded on a blockchain, often around the clock, and settled in a stablecoin instead of dollars through a bank.
**Why bother.** Supporters point to faster settlement, trading outside normal market hours, and access for people in places where buying US shares is awkward. Fractional ownership is easier too, since a token can be divided in ways a share certificate cannot.
**What you actually own.** This is the part to read carefully. The token’s terms decide your rights. Some give you the economic benefits, such as dividends. Some pass on voting rights. Almost none put your name on the company’s own shareholder register, which stays in the name of the custodian. You hold a claim on a claim.
**The risks.** You depend on the issuer holding the shares it says it holds, on the custodian staying solvent, and on the legal structure standing up if something breaks. Liquidity can also be thin, so the token’s price can drift from the share’s.
**Why it is news.** Regulators in several markets are creating routes for tokenised securities to trade on regulated venues. If those venues open, tokenised stocks could move from a niche product to part of ordinary markets.
**The test.** Before buying one, ask what the token entitles you to, who holds the underlying share, and what happens to your claim if the issuer fails.
