What is tokenization?

A share of Apple lives in a building in New York.

Not literally. There is no paper certificate in a drawer. But the record of who owns it sits inside a small circle of institutions in one country, it can only change hands while that building is open, and the building is open for six and a half hours a day, five days a week. That is 32.5 hours out of 168.¹

If you live in Lagos, or Accra, or Nairobi, you are also outside the building. To get in you need a broker who has an arrangement with a broker who has an arrangement with someone inside. Every layer costs money, keeps its own hours, and holds your asset in its own name on your behalf.

Tokenization is the workaround. On 17 September 2026 it also became mainstream policy: the US Securities and Exchange Commission issued a five-year exemption that lets tokenized versions of US-listed stocks trade on public blockchains, provided the tokens are backed by real shares and carry the same rights as those shares.² The regulator that spent years arguing about this has now written the rules for it.

So it is worth understanding what the word means, because a lot of what you will read about it is either hype or fine print.

The one-sentence version

Tokenization is taking a right to something real, a share, a bar of gold, a government bond, a dollar in a bank account, and issuing a digital token on a blockchain that stands for it, backed one to one by the real thing held by a custodian.

Three words in that sentence carry the weight. Real: the asset exists and someone holds it. Backed one to one: for every token there is exactly one unit of the asset behind it, no more tokens than assets. Custodian: a regulated institution whose job is to hold the asset and prove it is there.

Everything else is plumbing.

How it actually works

Walk through a single tokenized share of Nvidia.

1. An issuer buys the real share. The issuer is a company set up to do exactly this. It buys one share of Nvidia on the stock market, the ordinary way, through a broker.
2. A custodian holds it. The share does not sit with the issuer. It sits with a regulated custodian, in a segregated account, the same kind of institution that holds shares for pension funds. The custodian publishes or audits the balance so anyone can check that the shares are there.
3. The issuer mints a token. One token, on a public blockchain, that says "this stands for one share of Nvidia held at the custodian." The token has a ticker and a price that tracks the share.
4. The token moves like any other token. It can sit in a wallet you control. It can be sent to someone else in seconds. It can be traded on-chain at 3am on a Sunday, because the blockchain does not know what time it is.
5. Redemption closes the loop. An eligible holder can hand a token back to the issuer and receive the value of the underlying share. The issuer then sells the real share and burns the token. That redemption right is what keeps the token's price tied to the share's price.

The line to remember: you hold the token, they hold the share. You have a claim on something real, and the real thing is sitting with a custodian, but you are not on Apple's shareholder register. That distinction matters later.

You have probably done this already

If you have ever held USDT or USDC, you have used a tokenized asset.

A dollar stablecoin is a tokenized bank deposit or Treasury bill. An issuer holds dollars and short-term US government debt with custodians, and mints one token per dollar. You can hold it in your own wallet, send it across a border in a minute, and redeem it for dollars. It is the most successful tokenized asset in the world, and Nigerians adopted it at scale years before the word "tokenization" appeared in a bank's annual report.

That is the part global commentary tends to miss. Tokenization is usually pitched as a future. In Nigeria it is a past tense. When the naira lost most of its value against the dollar between 2023 and 2024, people did not wait for a conference panel to explain why a portable, dollar-denominated, always-open asset might be useful. They opened a wallet. Necessity got there before ideology did.

Tokenized stocks, Treasuries and gold are the same idea applied to the next asset class. The mechanism you already trust for dollars now holds shares.

What can be tokenized

Roughly in order of how much has actually been done:

• Dollars. Stablecoins, hundreds of billions of them. The proven case.
• US Treasury bills. Funds from the largest asset managers in the world now issue tokenized shares of money market funds. Around $13 billion sat in tokenized Treasuries by mid-2026.³
• Gold. Tokens backed by allocated bars in vaults in London and Zurich. One token, one ounce, redeemable for metal above a minimum size.
• Stocks and ETFs. Apple, Nvidia, Tesla, the S&P 500 and several hundred other tickers, issued by a handful of companies, trading on Solana, Ethereum and other chains. Tokenized stocks had a market value of about $1.6 billion in June 2026, up roughly 240 percent since January, and $4.3 billion of them traded on-chain in a single 30-day window that summer.⁴
• Private credit, real estate, funds. Growing, slower, and mostly institutional for now.

In total, tokenized real-world assets on public blockchains passed roughly $47 billion in September 2026, up from about $34 billion in May.⁵ Still tiny next to the $100-trillion-plus global stock market. Also growing at a pace that has stopped being ignorable to the people who run that market.

Why anyone bothers

Four reasons. The first three are the ones being cited this week as the whole point of the SEC's exemption.

It does not close. A token trades all 168 hours of the week. When news breaks on a Saturday, the price moves on Saturday and you can act on Saturday. The building is still shut. You are just no longer inside it.

It is fractional by default. A token can be split to eight decimal places. You can hold a fraction of a share of a company whose full share costs more than a month's salary, without a broker choosing to allow it.

It settles in seconds. When you buy a share the traditional way, the money and the share take a day to actually change hands (it used to be two). On-chain, the token and the payment swap in the same transaction. There is no in-between period where you are owed something.

It is portable. A token in a wallet you control can be moved to another wallet, another app, another country, without asking anyone. Your shares are not trapped inside the broker who sold them to you.

There is a fifth reason that matters more the further you live from New York. The token does not need you to have a foreign brokerage account, a US address, or a relationship with a bank that has a relationship with a bank. It needs a wallet and a way to fund it.

Where it falls short

This is the section most explainers skip. Read it twice.

You do not own the share. You own a claim on an issuer who owns the share. If the issuer fails, you are a creditor of the issuer, with a claim on the shares held at the custodian. That is a much better position than an unsecured creditor, and the segregated custody is precisely designed for this case. But it is not the same as your name on the register. A token is exposure to Apple's price, backed by an Apple share. It is not Apple stock.

You usually cannot vote. Most tokenized stocks do not pass voting rights through to holders. The custodian holds the votes and typically abstains. If you care about voting at a shareholder meeting, this is not the product.

Dividends arrive differently. Most issuers do not pay you cash when the company pays a dividend. They reinvest it, after US tax is withheld, so the token quietly represents a little more than it did. That is a whole article of its own, and it is the next one on this blog.

Weekend prices are estimates. When the real market is closed, the token still trades, but the only price anyone can see is the price other token holders are willing to pay. Spreads widen. If a company gets acquired on a Saturday, the token cannot know until Monday. A blockchain cannot tell "the price is stale because it is Sunday" from "the price is stale because something happened."

Liquidity is thinner than the real thing. Billions in monthly volume sounds like a lot until you compare it to the New York Stock Exchange, which does that before lunch. On popular names the difference is small. On thin names, the price you get can be noticeably worse than the last print you saw.

Tax does not disappear. A dividend on a tokenized US stock is still a US-source dividend. The United States withholds 30 percent for residents of countries without a US tax treaty, and Nigeria does not have one.⁶ Your own country's rules on capital gains still apply. The token changed the wrapper, not the tax code.

The rules are still being written. The SEC's exemption is five years long and explicitly temporary. Other regulators are behind it or ahead of it. Products that exist today may have to change shape.

None of this makes tokenization a bad idea. It makes it a specific idea, with specific trade-offs, and anyone selling it to you without the second half of this list is selling you something else.

Where Bybull comes in

Bybull is a self-custodial neobroker. That sentence is doing two jobs, so take them one at a time.

Neobroker means one app for the things a broker used to do separately. On Bybull you can buy tokenized US stocks and ETFs, the kind described above: issued against real shares held with a custodian, backed one to one, fractional, and open all week. When you buy, Bybull requests quotes from leading providers and routes your order to the best available price. The tokens settle into your own wallet.

Alongside that, you can trade perpetual futures on US stocks, commodities like gold and oil, crypto and forex. A perpetual future is a different instrument and it is worth being precise about it: it gives you price exposure, long or short, with leverage, and settles in dollars. You do not own anything underneath it, there is no dividend, and a funding rate is paid or received depending on which side of the market is crowded. Leverage means a position can be liquidated if the market moves against you. Spot for holding. Perps for trading. Same app, same balance.

Self-custodial means the tokens, the dollars and the positions sit in a wallet only you control. Bybull never holds your funds or your keys. Every action needs your sign-off, and you can move your assets to any other wallet whenever you want. That is the portability described above, taken seriously.

Fund from your bank, buy, trade, cash out to your bank. The building in New York still closes at four. On-chain, it never did.

Next on this blog: how dividends actually reach you when the share you hold is a token.

Footnotes

1. The New York Stock Exchange's core trading session runs 9:30am to 4:00pm Eastern, Monday to Friday, excluding holidays. See nyse.com/markets/hours-calendars. ↩

2. US Securities and Exchange Commission, "SEC Issues 'Innovation Exemption' to Facilitate the Trading of Tokenized NMS Stock and Request for Comment," press release 2026-90, 17 September 2026, sec.gov. The order requires that tokenized stock confer the same rights as the underlying stock, excludes synthetic tokens and derivatives, and runs for five years. ↩

3. Tokenized US Treasuries outstanding, rwa.xyz, mid-2026, approximately $12.9 billion. ↩

4. On-chain tokenized stock market value and volume, rwa.xyz data as of 2 June and 16 June 2026. ↩

5. Total tokenized real-world assets on public blockchains, rwa.xyz, approximately $33.8 billion on 20 May 2026 and $46.7 billion in September 2026. ↩

6. Internal Revenue Service, "United States Income Tax Treaties, A to Z," irs.gov. The default withholding rate on US-source dividends paid to non-resident aliens is 30 percent, reduced only where a treaty applies. Nigeria is not on the treaty list. ↩