Why Major US Companies Are Pushing Back Against Stock Tokenization: MEXC CEO

Unlocking Idle Stablecoin Capital

Equity tokenization is rapidly transitioning from a niche blockchain experiment into a core structural shift in global finance. As institutional and retail investors grow increasingly dissatisfied with legacy market infrastructure, onchain equities are capturing significant market share. Recent industry estimates value the global tokenized equity market near $6 billion, signaling that the multi-billion-dollar sector is reaching a critical tipping point toward mainstream adoption.

Beyond these friction points, Vugar Usi Zade, the CEO of the cryptocurrency exchange MEXC, points to changing capital dynamics and utility as the primary drivers of this shift. He notes that more than $300 billion in stablecoins sits in blockchain wallets, which is essentially capital seeking exposure to traditional assets without exiting the crypto ecosystem.

“Limited trading hours and cross-border transaction frictions are merely the visible symptoms of a deeper issue,” Usi Zade said. “The underlying driver is changing demand. Tokenized stocks have become the first instrument allowing this capital to be invested in assets other than cryptocurrencies without leaving the blockchain ecosystem. Essentially, we are giving holders of dollar-denominated assets the opportunity to invest in stocks with a single click.”

This demand is particularly evident in high-growth technology sectors. Recent data from MEXC revealed that artificial intelligence companies accounted for six of the top 10 most-traded tokenized U.S. equities and ETFs in September, capturing 59% of top-10 volume. Usi Zade attributes this outsized demand to a combination of global access barriers and overlapping investor psychologies.

“Our user base consists of people from around the world, predominantly younger users who often lack access to traditional financial markets,” Usi Zade said. “An investor in Lagos or Jakarta reads the same AI news as a fund manager in Connecticut, but they don’t have equal opportunities to buy stocks. Tokenization provides that gateway to the market.”

He added that early cryptocurrency adopters share a similar risk appetite and outlook with early AI enthusiasts. “AI is the first market narrative that has proven as compelling to the crypto community as cryptocurrencies themselves.”

Usi Zade expects this interest to expand into adjacent sectors, particularly defense, aerospace, energy, and publicly traded companies tied directly to the crypto industry—such as exchanges, mining firms, and stablecoin issuers.

“When a user buys a tokenized share of a crypto company on a cryptocurrency exchange, it creates a closed-loop ecosystem—and it is precisely within such ecosystems that liquidity reaches its greatest depth,” he explained.

Usi Zade also emphasized capital efficiency, pointing out that tokenized shares offer utility impossible in legacy accounts—such as being used as collateral, added to liquidity pools or embedded into yield strategies.

Corporate Resistance and Brand Risk Concerns

Despite offering investors distinct advantages that traditional platforms cannot, tokenized stocks still face opposition. In the latest high-profile case, Amazon, Tesla, Netflix, SpaceX, SoFi Technologies, and Lam Research joined other listed companies in objecting to OKXICE’s tokenized stocks plan. Nearly 50 firms have objected to being included on OKXICE’s upcoming platform, though none have detailed why they’ve opted out.

Before that, AMC CEO Adam Aron condemned Robinhood’s tokenized products linked to AMC shares, while a year earlier Citadel Securities submitted a letter to the SEC warning that tokenized equities could fragment liquidity and create investor confusion.

Despite growing pushback, Usi Zade believes corporate issuers do not oppose tokenization itself. Instead, their hesitation stems from brand risk—specifically, the fear that if an unauthorized tokenized asset carrying their company’s name fails, the public and regulatory fallout will fall squarely on them.

“They worry about having their name associated with a product they didn’t develop and being blamed if a synthetic wrapper’s price deviates from the underlying asset. The good news is that each concern is entirely legitimate, and each can be addressed,” the MEXC CEO told Bitcoin.com News.

He argues, however, that retail investor interest will remain unchanged, because they vote with their money every day and pay little attention to issuers’ statements. On the other hand, institutional investors who refuse to deal with unauthorized wrappers today “are simply waiting for issuer-approved versions to become available.”

In an attempt to address concerns raised by issuers, the U.S. Securities and Exchange Commission (SEC) introduced the Innovation Exemption framework. Under this framework, issuers must be notified before unaffiliated third parties tokenize their shares and can object. Furthermore, trading venues face limits on eligible stocks and trading volumes, while trading must stop when the underlying stock is halted on its primary exchange.

While critics fear this “veto” power poses a structural threat to on-chain liquidity, Usi Zade argues it has both positive and negative consequences.

“In the short term, this will fragment liquidity, while in the long term, it will legitimize it. A veto used as an outright ‘no’ would pose a threat, but issuers don’t actually want to say ‘no’—they want to control how their shares are represented on the blockchain,” Usi Zade said.

Building Bridges for Issuer-Approved Tokens

However, to prevent issuers from exercising their veto rights, Usi Zade said it is necessary to ensure full transparency regarding the structure of tokenized shares. Furthermore, platforms must establish a channel for engaging with issuers before listing and agree on a mechanism for converting third-party wrappers into issuer-approved tokens.

Looking ahead, he projects rapid scaling as major infrastructure players like Nasdaq, ICE’s New York Stock Exchange, and the DTCC enter the space.

“By 2027, I expect this market to exceed $25 billion, with at least 10 major issuers operating in it,” Usi Zade said. “Within three years, tokenized equity trading volume on major exchanges will surpass cryptocurrency spot trading volume, as the potential audience includes every equity investor worldwide.”