By James Royal, Ph.D., Bankrate.com

The cryptocurrency industry has lately begun to heavily promote tokenized stocks, but what exactly are they? More importantly, what advantages do tokenized stocks offer — especially when investors already have safe, no-cost fractional share trading at many brokers?

A tokenized stock is a fancy way of saying that ownership of a stock can be transferred via blockchain, the technology behind cryptocurrency . Tokenizing, or digitizing, assets such as stocks, ETFs and other securities allows them to be traded on a specialized digital exchange and potentially directly between investors without the need for an exchange. These tokens are held in a digital wallet , much as crypto coins are, similar to a traditional brokerage account.

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