Tokenized Stocks vs. Regular Stocks: Explaining the Difference

Tokenized stocks, crypto's take on traditional shares, have been one of the hottest topics in crypto lately. Still, for many traders, the difference between them and regular stocks may not be entirely clear.

If you've seen the option to buy tokenized stocks on XBO.com and wondered what they actually are (and whether they're worth your attention), this guide is for you.

Regular stocks

When you buy a regular stock, you're technically purchasing a share of ownership in a company. In practice, though, most people buy them to use as investment assets, expecting that the stock's price will rise over time and they'll be able to sell it for a profit (and, in some cases, earn dividends along the way).

Most regular stocks are bought and sold through stock exchanges, such as NYSE and NASDAQ in the US, the London Stock Exchange, the Tokyo Stock Exchange, and many others. Each operates during its own trading hours. Outside those hours, buying or selling simply isn't possible.

Here's what buying regular stocks typically involves:

- You open a brokerage account (which can take days to verify)

- You buy shares during your exchange's trading hours, on weekdays only

- The share is held by your broker on your behalf

- Dividends may be paid out if the company distributes them, though this varies

Tokenized stocks

Tokenized stocks traded on XBO.com are digital tokens issued on a blockchain that represent a real company's stock, backed 1:1 by actual shares held by a regulated custodian. This process is known as stock tokenization, and it's becoming increasingly common in the crypto space.

By purchasing one, you're not buying the stock itself. Instead, you get a token whose value mirrors the underlying share price in real time, giving you the same investment exposure.

Here’s how regular and tokenized stocks compare: