Tiger Research warns SEC's tokenized stock exemption could split exchange fees. Hyperliquid RWA OI hit $2.6 billion, signaling capital already moving onchain.
The US Securities and Exchange Commission is reportedly considering an innovation exemption that would allow third parties to tokenize listed stocks such as Apple and Tesla without issuer approval. A new report from Tiger Research argues that this policy shift could fragment both liquidity and revenue for traditional exchanges, with fee flows migrating to blockchain-based venues.
The research describes the potential breakup of centralized liquidity as a “serious structural threat” to traditional finance. The mechanism is straightforward: trading that currently sits on a single deep book at the NYSE or Nasdaq could spread across multiple blockchain networks and decentralized venues. That creates different prices for the same stock-linked asset across platforms and makes large trades harder if buyers and sellers scatter.
The reported exemption would let custodians, platforms, or tokenization services create onchain representations of public equities. The key condition is that the token must carry the same rights as the underlying share, including dividends and voting access.
SEC Commissioner Hester Peirce made the legal position explicit in a July 2025 statement:
“Tokenized securities are still securities.”
She added that market participants must follow federal securities laws when dealing with tokenized instruments. Blockchain does not change the asset’s legal nature, even if the trading venue shifts. That distinction matters because a tokenized stock held on a venue that does not enforce corporate actions – dividend payments or proxy voting – carries execution risk for holders.
Without issuer approval, the onchain representation may not align with offchain legal reality. Tiger Research notes that if one country permits tokenized trading faster than another, fees and activity can cross borders, undermining national market competitiveness. The report frames this as a structural threat to domestic exchange revenue.
Traditional finance treats the breakup of centralized liquidity as a serious structural threat, according to the report. If an Apple token trades on three blockchains at once, each venue may clear at a different price. That creates arbitrage opportunities price discovery becomes less reliable. A buyer executing a market order on the smallest pool could suffer significant slippage.
Institutional orders depend on depth. If the largest pool of a tokenized stock holds only a few million dollars, a $50 million trade could move the price 10% or more. Tiger Research uses the growth of Hyperliquid’s real-world asset derivatives to argue that capital is already voting for 24/7 onchain access.
The report interprets that surge as demand for continuous trading outside traditional settlement windows.
Fee revenue that normally flows to domestic exchanges, brokers, and clearing systems could shift to offshore platforms or new blockchain-based markets. The SEC exemption accelerates that shift if tokenized stocks trade on venues that are not regulated as exchanges.
If a US investor buys a tokenized Apple share on a platform based in Singapore, the trade generates no fee for the NYSE. Tiger Research flags this as a direct revenue leakage risk. Traditional exchanges are responding: Reuters reported in March that the NYSE partnered with Securitize to develop tokenized versions of financial securities for a future NYSE-affiliated digital platform. The NYSE plans to work with Securitize on digital transfer agent standards, trade processing, and tokenized security infrastructure. Reuters also noted that US exchanges including Nasdaq have been increasing efforts to put stocks, bonds, and funds on blockchain rails.
If the SEC moves slowly while jurisdictions such as Singapore or the UAE move fast, trading fees and market activity can shift across borders permanently. The report argues that financial competitiveness now depends on how quickly regulators allow tokenized markets within their own oversight.
Tiger Research uses two data points to show the trend is real, not theoretical.
| Metric | Value | Source |
|---|---|---|
| Tokenized stock value | $1.53 billion | RWA.xyz |
| Monthly transfer volume | $3.40 billion | RWA.xyz |
| Number of holders | 272,000+ | RWA.xyz |
| Hyperliquid RWA OI (May 18) | $2.6 billion | Hyperliquid |
The open interest figure for Hyperliquid’s RWA derivatives doubled from two months earlier, suggesting that onchain infrastructure is already capturing institutional flow. That puts pressure on exchanges and regulators who still rely on T+2 settlement and restricted trading hours.
Risk to watch: The SEC exemption is not yet final, and the $1.53 billion tokenized stock market is tiny relative to the $50 trillion US equity market. The mechanism is clear – once liquidity splits, it is hard to reunite. Exchanges that do not build their own onchain rails will watch fees leak to venues that have no fixed trading hours and no gatekeepers.
Related coverage: Tokenized stock liquidity fragmentation poses structural threat
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.