Hybrid Finance Q3 2026 Update

Contents

1. Executive summary
2. 1.0Tokenised stocks are growing fast because they meet existing demand
   1. 1.1Tokenised stocks are the fastest-growing tokenised asset class
   2. 1.2That growth raises two questions: what demand it serves, and whether it lasts
   3. 1.3The product is US equity exposure for investors outside the US
   4. 1.4That demand is large and already exists in traditional markets
3. 2.0The market is spreading across jurisdictions, issuers, and venues
   1. 2.1Issuance began in three jurisdictions, each led by one issuer
   2. 2.2Every layer has diversified; custody is following more slowly
   3. 2.3Trading has grown and spread across DeFi venues
4. 3.0The US has the most influence, but no single country’s policy is likely to stop growth
   1. 3.1Backed tokens send foreign capital into US equities
   2. 3.2Blocking backed tokens could move demand into derivatives
   3. 3.3Other jurisdictions are already competing for issuers
   4. 3.4Investors in most major economies can already choose among many issuers
   5. 3.5The risks could set the market back, but are unlikely to end it
   6. 3.6Investors gain access and choice; lower costs are the next test
   7. 3.7Tokenisation is now a policy choice for every jurisdiction
5. Data notes
6. About Token Terminal & CoinShares

Executive summary

Tokenised stocks are the fastest-growing tokenised asset class, and the evidence in this report suggests that no single country's policy is likely to stop their growth, although the US has the most influence, because a US broker-dealer holds most of the shares behind the tokens. Their market cap rose — year on year to —, against — for tokenised commodities, — for tokenised funds, and — for stablecoins. Adoption is broadening as well: onchain holder positions, the number of wallets holding each token summed across all tokens, reached —, — the level at the end of June.

The product is exposure to US equities for investors outside the US: — of tokenised stock market cap tracks US-registered shares and ETFs, and — is issued under terms that exclude US persons. That demand already exists in traditional markets, where foreign investors hold — of US equities; tokenised stocks equal — of that amount.

Issuance began in three places: issuers incorporated in Jersey, the British Virgin Islands, and the UAE account for — of market cap, and in each of the three a single issuing entity holds most of the value. Since September 2025, the number of countries of incorporation with more than $1M of tokenised stocks has risen from — to —, the number of issuing entities above $1M from — to —, and the number of underlying shares and ETFs above $1M from — to —. Over the same period, the largest participant's share of the market has fallen at every layer of the market (domicile, issuing entity, custodian, chain, trading venue, and underlying country), including custody: Alpaca Securities LLC, the broker-dealer that holds most of the shares backing the tokens, now holds —, down from —.

Growth can therefore continue along three routes, depending on US policy. If US regulators support tokenised stocks, as the SEC's approval of tokenised trading on Nasdaq suggests, more tokens can be issued in the US. If they do not, issuers outside the US already serve investors outside the US. If the US blocks tokens backed by US shares, investors would probably turn to derivatives instead: perpetual futures on US stocks traded on Trade.xyz already have — of open interest, the value of outstanding contracts, without anyone holding the underlying shares. Most tokens, unlike these derivatives, are backed by shares bought in the US market, which gives the US an economic reason to prefer them. Added demand for a country's assets has a measurable effect: a BIS working paper finds that inflows into stablecoins lower 3-month US Treasury bill yields by — to — basis points. Other countries face the same choice about tokenising their own listed shares, and they already compete to host the companies that issue tokens.

1.1  Tokenised stocks are the fastest-growing tokenised asset class

Tokenised stock market cap was — at the end of 2024 and first passed $100M on — (Exhibit). Growth then accelerated: market cap passed $1B on — and reached — on —, — more than a year earlier. No other tokenised asset class grew as fast over that year: tokenised commodities grew —, tokenised funds —, and stablecoins — (Exhibit). Growth has continued in recent months, with market cap up — in the third quarter. Part of this pace reflects a small starting base: the stablecoin market, at —, is — the size of the tokenised stock market.

1.2  That growth raises two questions: what demand it serves, and whether it lasts

The growth shown in section 1.1 raises two questions. First, what demand do tokenised stocks serve? Second, will that demand last? Sections 1.3 and 1.4 answer the first by describing what is bought and by whom. Sections 2.1 to 3.7 answer the second by examining how the market is built and how governments are responding.

1.3  The product is US equity exposure for investors outside the US

— of tokenised stock market cap tracks US-registered shares and ETFs, up from — at the end of June 2025 (Exhibit). — of market cap is issued under terms that exclude US persons, so the typical buyer is an investor outside the US buying exposure to US shares. A second, smaller segment has grown alongside: companies that issue their own shares as tokens, such as Securitize, account for — of market cap, up from —. Tokens tracking shares registered outside the US have moved the other way, falling from — to — of market cap. The demand behind the market, in other words, is demand from investors outside the US for US equities.

1.4  That demand is large and already exists in traditional markets

Foreign investors held — of US equities in July 2026, up from — in June 2024 and — in June 2025 (Exhibit). These holdings have grown over four decades, despite declines in 2001–02, 2008–09, and 2022. Tokenised stock market cap equals — of these holdings, so tokenised stocks are serving demand that already exists rather than creating new demand. The room to grow is large: 1% of foreign holdings of US equities would be —. Part 2 examines how the market has been built to serve that demand.

2.1  Issuance began in three jurisdictions, each led by one issuer

Issuers incorporated in Jersey, the British Virgin Islands, and the UAE account for — of tokenised stock market cap (Exhibit). In each of the three, one issuing entity holds most of the value: Backed Assets in Jersey (—), Ondo Global Markets in the BVI (—), and Btech Holdings, Binance's issuing entity, in the UAE (—). The issuers also serve different investors (Exhibit): tokens issued in Jersey average — per holder position, while tokens issued in the US, mostly Securitize's own shares, average —. The split by country of incorporation therefore mostly reflects where three large issuers chose to set up, and each serves a different type of investor. This concentration at the start has since eased considerably.

2.2  Every layer has diversified; custody is following more slowly

The market has six layers: domicile, issuing entity, custodian, chain, trading venue, and underlying country. Since September 2025, the largest participant's share has fallen at all six (Exhibit). On the Herfindahl-Hirschman index, which runs from near 0 for a fragmented market to 1 for a single participant, concentration fell from — to — for country of incorporation, from — to — for issuing entity, and from — to — for chain (Exhibit). The largest participant has changed at least once at four of the six layers since June 2025: chain, trading venue, country of incorporation, and issuing entity (Exhibit). Underlying securities have diversified even as US shares gained ground: — of market cap tracks US-registered securities, yet the number of distinct shares and ETFs above $1M grew from — in June 2025 to —, and the largest single security's share of market cap fell from — to — (Exhibit). Custody is diversifying more slowly: Alpaca Securities LLC holds the shares behind — of market cap, down from — in September 2025.

2.3  Trading has grown and spread across DeFi venues

Monthly trading volume in tokenised stocks on decentralised exchanges (DEXs) reached — in September 2026, against — in June 2025 (Exhibit). The value of tokenised stocks deposited in DeFi lending markets and liquidity pools reached — (Exhibit). Trading has also spread across venues: the largest, Uniswap, handled — of DEX volume in September 2026, down from — for the largest venue in September 2025 (Exhibit). Deposits in DeFi are split between DEX liquidity pools and lending markets (Exhibit). Because trading and deposits are spread across many venues, the closure of any one venue would affect only part of the market.

3.1  Backed tokens send foreign capital into US equities

Most tokens are backed by shares bought in the US market, so tokens issued outside the US still direct foreign investors' money into US-listed shares. Most of those shares are held by one US broker-dealer, Alpaca Securities LLC, whose share of tokenised stock market cap moved from — in September 2025 to — (Exhibit). The shares therefore stay inside the US financial system even when the token is issued in Jersey, the BVI, or the UAE. That matters to the US government because added demand for US assets lowers the cost of financing: a BIS working paper estimates that inflows into stablecoins lower 3-month US Treasury bill yields by — to — basis points. Exhibit applies the same logic to listed shares: added demand should lower companies' cost of capital, but at today's scale the effect is too small to measure.

3.2  Blocking backed tokens could move demand into derivatives

If the US restricted tokens backed by US shares, investors would probably still seek the same exposure through derivatives. Perpetual futures on US stocks and indices traded on Trade.xyz track share prices without anyone holding the shares, and their open interest, the value of outstanding contracts, grew from — in October 2025 to —; monthly trading volume peaked at — in July 2026 (Exhibit, Exhibit). These futures first grew faster than tokenised stocks: their open interest rose from — of tokenised stock market cap in October 2025 to — in June 2026, and has since fallen back to — as tokenised stocks grew faster. Unlike backed tokens, these futures do not require anyone to buy US shares, so supporting backed tokens keeps more of the investment in US markets. US regulators have acted on both (Exhibit): the SEC approved tokenised trading of listed shares on Nasdaq in March 2026, and the CFTC adopted a policy statement on perpetual futures in May 2026.

3.3  Other jurisdictions are already competing for issuers

Since September 2025, the number of countries of incorporation with more than $1M of tokenised stocks rose from — to —, and the number of issuing entities above $1M from — to — (Exhibit). Issuers also mix jurisdictions: Ondo, for example, incorporates in the BVI, writes its terms under Swiss law, and is supervised by Liechtenstein's FMA, and Exhibit traces market cap through each of these choices to the custodian. Countries may therefore compete separately to host an issuer's legal entity, to supply its governing law, and to supervise it. If the US supports tokens backed by US shares, other countries face the same choice about tokens backed by their own listed shares. So far, few have been tokenised: tokens tracking shares registered outside the US account for — of market cap.

3.4  Investors in most major economies can already choose among many issuers

When investors can buy foreign shares cheaply, countries compete for their capital on the quality of their rules, market infrastructure, and listed companies. Tokens lower that cost for investors in many countries at once, and issuers' published eligibility terms show which countries' residents can already buy them (Exhibit). Residents of Germany can buy from — independent issuers, which together account for — of tokenised stock market cap. Choice is narrower where issuers exclude residents: UK residents can buy from — issuers covering — of market cap, and Canadian residents from — covering —. US residents can buy from — issuers, mostly companies issuing their own shares as tokens. Investors served by several issuers in different countries are less exposed to any single government's policy decisions.

3.5  The risks could set the market back, but are unlikely to end it

For investors and firms building on Hybrid Finance, the relevant risk is not which country or company leads the tokenised stock market but whether the market as a whole could shrink. A single country's policy is unlikely to cause that: US support would probably move issuance into the US, and US restrictions would probably push demand towards issuers outside the US or into derivatives. Exhibit tracks four ways the market could still contract, and every indicator has moved in the market's favour since September 2025. The largest single point of failure is custody: Alpaca Securities LLC holds the shares behind — of market cap, so a failure there would affect most tokens at once, although its share is down from —. Coordinated restrictions by several countries are becoming harder to achieve as issuers spread across — countries of incorporation and — issuing entities, and investor demand is still rising, with holder positions up from — to —. Issuer risk remains material: — of market cap is held in tokens that give holders a claim on the issuer rather than direct ownership of the share, down from —, so the failure of one large issuer could still damage confidence across the market.

3.6  Investors gain access and choice; lower costs are the next test

Onchain holder positions in tokenised stocks reached —, — the level at the end of June (Exhibit). Investors can choose among — issuing entities and — chains that each hold more than $1M of tokenised stocks, and — DEX venues that each trade more than $1M a month. So far, the main gain for investors outside the US is access to US equities and a choice of providers. Competition among these providers should lower fees and narrow bid-ask spreads over time; this report does not yet measure either, and both are the next measures to add.

3.7  Tokenisation is now a policy choice for every jurisdiction

Tokenised stocks have grown into a — market that gives investors outside the US exposure to US equities, through issuers in many countries and trading on many venues. Growth can continue along three routes: through issuance in the US if US policy supports it, through issuers outside the US if it does not, and through derivatives if the US blocks tokens backed by US shares. No single country's policy decisions are likely to close all three. For issuers, the choice of where to incorporate, which law to use, and which regulator to answer to is now a competitive decision; for investors, the gain so far is access, while costs are still to be measured. Three indicators will show whether growth stays broad: the share of market cap held by the largest custodian, now —; the number of underlying shares and ETFs above $1M, now —; and onchain holder positions, now —.

Data notes

This section lists the definitions, inclusions, and exclusions behind every figure in the report. All figures come from the Token Terminal data catalogue unless an exhibit names an external source. The universe is every asset classified as a tokenised stock in the Token Terminal disclosures table: — assets listed, of which — had live supply. Data is as of close —. The table below lists each metric and how it is treated.

About Token Terminal & CoinShares

Acknowledgements. This report is produced by CoinShares in collaboration with Token Terminal. Token Terminal is an onchain data platform that standardises financial metrics for blockchains, applications, and tokenised assets. CoinShares is responsible for the analysis, interpretation, and views expressed throughout.

Data. All data in this report is sourced from Token Terminal unless an exhibit names an external source. Data is as of close —. External figures from the US Treasury, the Federal Reserve Board, the BIS, LSEG Lipper, and dated policy sources are listed in Data notes. Every Token Terminal figure is tied to the query that produced it and can be reproduced from the Token Terminal data catalogue.

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