Tokenized Stocks Make Inroads into Mainstream Investing
Ivan Takev, Head of Capital Markets & Investments at Alaric Securities, on “Business Start”
Tokenized stocks, an asset-backed yet non-derivative financial instrument, are likely to gain increasing traction among retail investors as regulatory clarity in Europe begins to take shape. That was the key message from Ivan Takev, Senior Manager at Alaric Securities and former CEO of the Bulgarian Stock Exchange, during his appearance on Business Start with host Hristo Nikolov.
Takev commented on Robinhood’s recent launch of tokenized stock products in the European market, which are governed under the EU’s Markets in Crypto-Assets Regulation (MiCA). The regulation aims to provide greater predictability and legal certainty for market participants engaging in crypto-based financial services.
“The Lithuanian central bank has already posed regulatory questions to Robinhood, seeking further clarity on the nature of the service,” Takev noted. “Tokenization enables traditional assets—like equities—to be represented and traded as digital tokens, typically via blockchain infrastructure.”
He emphasized that while blockchain significantly reduces transaction settlement times and simplifies the fund transfer process between counterparties, liquidity challenges remain a key concern. “This is especially relevant for smaller, retail investors who benefit from lower execution friction,” he added.
Takev highlighted security as one of blockchain’s major advantages, though he cautioned that risks such as account hacking are not entirely eliminated.
Regulatory Headwinds and First-Mover Advantage
Robinhood’s foray into tokenized stocks is not without obstacles. According to Takev, the initiative faces a lack of established legal precedent and comprehensive regulatory frameworks. Nevertheless, he views the company’s bold move as a net positive.
“We are witnessing the gradual erosion of the boundaries between traditional finance and decentralized finance (DeFi),” he said. “Robinhood’s involvement could pave the way for broader adoption and increased confidence in the tokenization model.”
European regulators, Takev pointed out, are expected to enforce strict compliance, which is consistent with their broader supervisory philosophy. He referenced SEC Commissioner Hester Peirce. She recently reiterated that crypto-assets have unique properties. They still must adhere to U.S. securities laws when applicable.
Private Markets: A Longer Road Ahead
Tokenization of private companies remains a more complex and less immediate prospect. The process involves additional compliance burdens and structural constraints. However, Robinhood’s entry could act as a catalyst, encouraging other market players to explore equity-backed token offerings.
“What we’re seeing is the convergence of traditional finance with the crypto sector,” Takev concluded.
Watch the full interview in the video below.
Source: BloombergTV Bulgaria