Here’s a strange situation worth thinking about. The world’s largest equity market, home to Tesla, Apple, Microsoft and Coinbase, has produced a generation of retail investors who can buy fractional shares in seconds from their phone. And yet, a fast-growing category of digital financial products built almost entirely around those same US companies is being offered to everyone except the Americans those companies were built for.

That’s the unusual starting point for this conversation. Tokenized stocks are real, they’re growing at a pace few predicted, and they’re raising genuine questions from US investors who keep hearing about them. Right now, xStocks holds the position of largest provider of tokenized stocks globally, and it’s built almost entirely on US equities. CFDs, meanwhile, are a product most Americans have never actually used but keep encountering in international fintech coverage. Sorting out what each product actually is, how they structurally differ, and what the regulatory picture looks like today will save you a lot of confusion down the line.

Two Products, One Confusion

Let’s start with the simpler point. If you’re a US retail investor, CFDs aren’t available to you through any domestic broker. Full stop. The CFTC and SEC classify contracts for difference as swaps or securities-based swaps, and the regulatory framework effectively prohibits their sale to US retail investors. Any firm offering them domestically without proper approval faces enforcement, including fines and cease-and-desist orders. So if you’ve seen CFDs discussed in trading content and wondered why you can’t find them on Fidelity or Schwab, that’s why.

For investors outside the US, CFDs have been widely available for years, particularly in Europe and Asia. The basic mechanic is straightforward: you enter a contract with a broker, agreeing to exchange the difference in an asset’s price between opening and closing the trade. You never own the underlying asset. You’re tracking price movement, often with leverage, and your only counterparty is the broker. Leverage is central to how CFDs are typically marketed; it amplifies both gains and losses, which is part of why regulators in several jurisdictions have imposed strict limits on how much retail traders can access.

Tokenized stocks work differently, at least in the fully-backed model. A tokenized stock in this category is an on-chain token that represents a 1:1 interest in a real share held by a licensed custodian. The most prominent example right now is xStocks, issued by Kraken and Backed Finance (operating through Backed Assets (JE) Limited). The structure works like this: shares are purchased and held by a licensed custodian through a Swiss-regulated special purpose vehicle, and each token issued on-chain corresponds to exactly one real share in that custodial structure. The token carries an ISIN number. It’s tradeable on-chain, transferable between wallets, and accessible on both centralised exchanges and DeFi protocols. That also means the token can be used as collateral in DeFi lending markets, a feature with no real equivalent in the CFD world.

That’s a meaningfully different architecture to a CFD. But the distinction only holds if the tokenized product in question is genuinely fully backed. More on that shortly.

Owning vs. Tracking

In normal market conditions, a CFD tracking Apple and a tokenized Apple stock will both follow Apple’s price. That’s where the similarity ends.

The practical difference shows up when things go wrong. With a CFD, if your broker defaults, you have no legal claim on any Apple share because you never owned one. You’re an unsecured creditor in an insolvency proceeding. With a properly structured, fully-backed tokenized stock, the underlying share sits in a bankruptcy-remote custodial structure; your token has a verifiable claim on a real asset. That distinction matters more than most CFD marketing lets on.

This is also where some honesty is needed. Not every product calling itself a ‘tokenized stock’ uses the fully-backed model. A category of synthetic or wrapper tokens exists that tracks price without any custodied share behind it. Anton Golub, CBO of Freedx, made this point publicly in 2025, arguing that synthetic tokenized products behave identically to CFDs despite the different branding. He’s not wrong about the synthetic variety. The category isn’t monolithic, and the distinction between a fully-backed token and a synthetic one is exactly the kind of detail that matters before you invest in either. When a product doesn’t disclose its custodial structure clearly, that absence of transparency is itself informative.

The SEC addressed this directly. On January 28, 2026, the agency published a formal statement confirming that tokenization doesn’t change a security’s underlying legal status, and flagged synthetic tokenized models as carrying additional regulatory risk. That might sound like a warning, but it’s actually clarifying. The SEC is implicitly validating the custodied, fully-backed model by distinguishing it from synthetic products. Regulatory specificity, even when it creates constraints, is how a market earns long-term credibility.

There’s one legitimate weakness both products share, worth naming. Several CFD broker executives flagged it when tokenized stocks launched in mid-2025: 24/7 access sounds appealing, but liquidity outside market hours is thin. No market maker can hedge exposure on weekends, which means spreads widen and prices may not accurately reflect fair value. That applies to tokenized stocks as much as it does to CFDs. Investors used to the tight spreads of traditional equity markets should factor this into any after-hours trading decisions.

Why US Investors Are Watching From the Sidelines

Here’s where the numbers start telling a story. The tokenized equities market crossed $963 million in total value in January 2026, up from approximately $32 million in January 2025. That’s roughly 2,878% year-on-year growth. And yet, every major platform serving that market has restricted US retail access.

xStocks reached $25 billion in combined transaction volume in under eight months, with nearly $225 million in aggregate AUM and more than 80,000 unique on-chain holders. Kraken, Bybit, Robinhood, Gemini and Dinari (the first FINRA-approved broker-dealer for tokenized stocks) are all active in this space. None of them serve US retail investors. Dinari’s FINRA approval is worth noting separately; it signals that a compliant domestic pathway for tokenized equities is structurally achievable, even if the retail rollout hasn’t followed yet.

There’s only one platform actively trying to change that. Coinbase filed with the SEC in June 2025 seeking a ‘no action letter’ to offer blockchain-based tokenized stocks to US retail customers. The company attempted something similar in 2021 before being blocked by the previous administration’s regulatory posture. The current environment is different; the SEC’s January 2026 statement suggests the agency is at least working toward a clearer taxonomy for compliant tokenized securities. A no-action letter, if granted, wouldn’t automatically open the market, but it would remove the legal ambiguity that has kept every other platform from trying.

In December 2025, Kraken announced its acquisition of Backed Finance, consolidating the largest tokenized equities infrastructure under one company. Kraken’s stated ambitions extend well beyond non-US markets, and having proprietary issuance infrastructure changes what’s possible from a regulatory licensing perspective.

What Investors Should Actually Be Doing Right Now

Not having access today isn’t the same as having nothing useful to do. The gap between where the market is now and where it’s heading gives you something genuinely valuable: time to understand it properly.

Three specific signals are worth following:

• The Coinbase SEC filing: Whether the ‘no action’ request progresses (and on what terms) will set a precedent for how tokenized equities can be structured for US retail access
• Kraken’s post-acquisition direction: How Kraken integrates Backed Finance’s infrastructure, and whether that includes US licensing ambitions, will indicate when the largest tokenized equity provider might reach domestic investors
• SEC rulemaking: Whether the January 2026 taxonomy statement leads to formal rules gives the clearest signal of timeline; formal rules create compliant pathways; without them, platforms continue to exclude US users out of caution

The broader trajectory is encouraging. The tokenized securities market is projected to reach $37.93 billion by 2035, growing at a 19% compound annual growth rate, with North America identified as the leading region. The US isn’t a market that tokenized equities will reach eventually; it’s the market the entire category is building toward.

Understanding which model of tokenized stock you’re looking at (fully-backed vs. synthetic), which platforms are building compliant infrastructure, and what regulatory milestones actually matter will put you in a genuinely different position to investors who only start paying attention when a product lands in their brokerage app. The groundwork being laid now, in regulatory filings, custodial structures and exchange licensing, is what determines whether the products that eventually reach US investors are sound or simply rebranded versions of instruments that already exist.

The Line Regulators Are Drawing

The CFD versus tokenized stock comparison ultimately comes down to a question about what financial products should do: track price, or represent ownership. CFDs were always designed for the former. Fully-backed tokenized stocks, built properly with custodied underlying shares, are genuinely attempting the latter, and the SEC’s January 2026 statement suggests regulators are beginning to draw that line formally. That distinction, once enshrined in formal rulemaking, will likely determine which products are permitted to scale in the US and which face the same barriers CFDs have encountered for years.

US investors can’t buy xStocks today. That will likely change, and the platforms, regulatory filings and structural groundwork are already in place. The investors who understand what they’re being offered when that door opens, and specifically whether the product in their hands is a custodied token or a synthetic price tracker dressed up as one, will be far better equipped to make a real decision. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.