- Millions of international investors could gain more affordable access to U.S. equities through tokenization.
- Synthetic equity tokens can divert trading activity, liquidity and fees away from U.S. exchanges.
- Nearly 200 U.S. companies have already been tokenized in this way, in a market Citi projects could reach $2.7 trillion by 2030.
Tokenization Could Expand Global Access to U.S. Stocks
Beyond their dispute, Tenev has identified a significant opportunity: giving millions of underserved international investors access to U.S. equity markets. The United States has a population of approximately 340 million, while the number of individual investors living outside the country is at least as large. However, most international investors cannot currently buy U.S. stocks directly or do so at an affordable cost.
Expanding access through tokenization could direct more global investment into American companies. The resulting increase in available investment capital could represent the biggest opportunity for U.S. markets in more than 50 years.
How Synthetic U.S. Equity Tokens Work
Companies offering synthetic securities, however, view this generational opportunity as a business opportunity of their own. By placing themselves between international investors and U.S. markets, these firms seek to capture the trading activity, liquidity and fees generated by worldwide demand for American stocks.
Put more bluntly: Synthetic tokenization of U.S. equities shortchanges the American public.
A synthetic wrapper connects with U.S. capital markets only once, when the issuer purchases shares to hold as collateral. After that initial transaction, trading takes place offshore between token holders. Those transactions do not reach the exchanges where the underlying companies’ shares are listed and traded.
Potential Impact on U.S. Companies and Investors
This structure can redirect investor demand away from the U.S. equity market. Although the demand is linked to a U.S. company, it does not represent a genuine increase in that company’s market capitalization because subsequent token trading occurs outside the exchanges where its shares trade.
Nearly 200 U.S. companies have already been tokenized in this manner. Citi projects that the market could reach $2.7 trillion by 2030, meaning the potential opportunity cost for American companies and portfolios could grow as the mismatch between global demand and U.S. market participation expands.
Why This Matters
The central issue is whether tokenization will broaden direct participation in U.S. capital markets or create offshore substitutes that capture the economic benefits of that demand. Greater international access could bring substantial new investment to American companies, but synthetic structures may allow much of the resulting trading, liquidity and fee activity to occur outside U.S. exchanges.
The scale of the potential market makes the distinction increasingly important. With nearly 200 U.S. companies already represented through synthetic tokens and a projected market size of $2.7 trillion by 2030, how these products connect investors to underlying shares could have significant consequences for U.S. companies, exchanges and portfolios.
Frequently Asked Questions
What opportunity does Tenev recognize?
Tenev recognizes the opportunity to give millions of international investors more direct and affordable access to U.S. equity markets through tokenization.
Why can synthetic tokenization divert value from U.S. markets?
The issuer typically buys the underlying shares once as collateral, but subsequent trading occurs offshore between token holders rather than on the exchanges where the company’s shares trade. This can redirect trading activity, liquidity and fees away from U.S. markets.
How large could the tokenized U.S. equity market become?
Citi projects that the market could reach $2.7 trillion by 2030. Nearly 200 U.S. companies have already been tokenized in the described manner.