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Glossary

Tokenized stock

A blockchain token representing a claim on a real share held by a custodian. The holder owns the token, not the underlying equity directly.

A tokenized stock is issued by a company (for example Backed Finance for Kraken's xStocks) against a real share it holds in custody. The token tracks the share's price and can settle on-chain 24/7, but legally you own the token and a claim on the underlying — not the registered equity.

Because it is a claim rather than the share itself, a tokenized stock carries issuer and custody risk and usually limited or no shareholder rights. Its trustworthiness rests on a named, regulated issuer with verifiable 1:1 backing.

Related terms

RWA (Real-World Asset)An off-chain asset — such as a treasury bill or equity — represented on-chain as a token issued by a regulated entity.
CFD (Contract for Difference)A leveraged derivative that pays the difference between a stock's entry and exit price. No share is owned and there are no shareholder rights.
CustodyWho legally holds the underlying asset that backs a token. Custody arrangements determine counterparty risk and redemption rights.