TD Cowen does not expect tokenized US stocks — blockchain versions of listed shares that under the SEC framework must replicate the underlying securities' dividends, voting power and liquidation rights — to attract significant American demand, even after the Securities and Exchange Commission opened a five-year pathway for the product on Sep. 17. In a paper published Friday, Reid Noch, the bank's vice president of US equity market structure, argued that adoption among both domestic retail traders and institutions should remain limited while the market is in its early stage.

The reasoning is structural. US investors already obtain fast, low-cost execution on listed shares through brokers that offer premarket and after-hours sessions, so any blockchain venue must deliver a benefit large enough to offset thinner liquidity and heavier operational demands. The exemptions give venues legal room to operate, but they do not by themselves manufacture the liquidity edge needed to pull order flow away from incumbent brokers.

Figure Data Anchors the Skepticism

The bank's clearest evidence comes from Figure, the crypto-adjacent lender whose Nasdaq-listed FIGR shares trade alongside blockchain-native FGRS tokens carrying identical economic exposure and voting rights. Because the two instruments carry the same shareholder terms, the volume split between them works as a direct test of trader demand rather than of differing rights. Across the 24-hour window TD Cowen examined, conventional FIGR shares captured 99.9% of the company's notional trading — proof, in the bank's reading, that matching dividend and governance rights alone do not pull volume away from a traditional exchange.

Issuer resistance compounds the problem. Under the SEC framework, a venue must notify a company before tokenizing its stock, and the issuer then has 30 days to object, which halts that trading outright. Noch reported that discussions with dozens of issuers — several of them heavily retail-facing names of the kind that powered the Game (GME) era — revealed scant interest outside crypto-linked businesses.

The SEC's investor protections raise the bar further. Qualifying tokens must preserve each underlying share's economics, including dividends, voting power and liquidation rights; venues face caps on how many stocks they support and how much volume they process; and any tokenized share must halt whenever the primary exchange halts the underlying security. Approved venues would price trades through permissioned automated market makers — pooled assets governed by preset rules rather than an order book, the pool-based liquidity model familiar from DeFi markets such as Aave (AAVE). Noch cautioned that thin pools outside the main US session can still produce weak execution.

Perpetuals Outdraw Tokenized Shares

The exemption's mechanics explain some of the caution. Under the Innovation Exemption, qualifying tokenized securities venues can operate automated market maker pools for five years without registering as exchanges, and certain liquidity providers receive temporary relief from dealer registration, subject to conditions. The framework landed just days after the CLARITY Act failed to advance, leaving broader crypto market-structure legislation stalled in Washington.

For traders seeking exposure to public companies, TD Cowen sees the real flow elsewhere: perpetual futures. In a Binance snapshot of Nvidia-related trading, perpetuals generated 96% of notional volume against 4% for spot products, and the bank expects platforms to keep expanding the contracts at home and abroad, driven by retail appetite for leverage. Noch called perpetual futures "the stronger demand story."

The contracts track a stock's price without transferring ownership, carry no fixed expiration, stay anchored through recurring funding payments, and offer leverage that raises liquidation risk when prices turn. For readers weighing the two products, that distinction is the heart of the story: perpetuals deliver price exposure and leverage but none of the shareholder rights the SEC requires tokenized stocks to preserve.

Filing activity backs the comparison. On Sep. 18, Coinbase filed proposals for more than 50 stock perpetuals referencing Nvidia, Microsoft, Tesla and other names, with plans for 24-hour trading Monday through Friday pending US regulatory clearance — no launch date or full contract specifications have been announced.

Ondo Finance has separately petitioned the SEC and the Commodity Futures Trading Commission to extend existing security-futures rules to stock perpetuals. Its regulatory submissions state that the protocol's Panama-based affiliate processed $8 billion in cumulative volume in roughly six weeks. That offshore venue settles contracts in stablecoins — the dollar-pegged settlement layer that yield-bearing stablecoin designs have pushed deeper into DeFi collateral — and remains closed to US users, though many of its contracts reference US-listed companies. Its proposed US-regulated equivalents would provide leveraged price exposure without voting rights, dividends or share ownership.

Coinbase's Perpetuals Filing in Focus

The combined picture from the primary records is that the SEC has built a demanding experiment rather than an open door. The TD Cowen paper's Figure data and Ondo Finance's own regulatory submission — the filing documenting $8 billion of offshore perpetual volume in about six weeks — point in the same direction: tokenized spot equities carry full shareholder rights but depend on issuer consent, volume caps and halt rules, while trading migrates toward leveraged derivatives that grant none of those rights. Whether Coinbase's pending batch of 50-plus perpetual contracts wins clearance — and whether issuers in the meantime use their 30-day objection windows on tokenized listings — will show how much of that demand US venues can recapture.