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Here's How "Tokenized" Stocks Are Revolutionizing Investment Access
Here's How "Tokenized" Stocks Are Revolutionizing Investment Access

Yahoo

time2 days ago

  • Business
  • Yahoo

Here's How "Tokenized" Stocks Are Revolutionizing Investment Access

Key Points Robinhood is now offering tokenized stocks to European investors, with plans to offer them to U.S. investors soon. Tokenized stocks are blockchain versions of traditional stocks, and can be traded just like crypto tokens. Before investing in tokenized stocks, it's important to read all the fine print, to make sure you understand what you actually own. 10 stocks we like better than Robinhood Markets › Tokenization has been one of the hottest buzzwords in the crypto industry for the past 12 months. Now we're finally starting to see what can happen when blockchain technology meets traditional stock market investing. On June 30, Robinhood Markets (NASDAQ: HOOD) shook up the financial world with the launch of tokenized stocks for retail investors. According to Robinhood Chief Executive Officer Vlad Tenev, these tokenized stocks represent the greatest innovation in capital markets in decades. But what, exactly, are they? And what do they mean for investors? What are tokenized stocks? Tokenization refers to the transformation of real-world assets into digital assets that live on the blockchain. Ownership in that asset is represented by a digital token that can be traded just like any crypto token. In this case, the real-world assets being transformed are stocks, and the place to trade them is on Robinhood's trading platform. For now, trading in these tokenized stocks will take place 24/5, but according to Robinhood, trading will soon be 24/7. It can be helpful to think of these tokenized stocks as digital twins. Robinhood buys a real-world stock, and then, with a little blockchain alchemy, transforms that into a digital token. In theory, this digital token will then mimic the price action of the real-world stock on a 1:1 basis. If the value of Company X goes up by 10% in one day, then the value of your token will go up by 10% as well. Pros Tokenization provides a number of advantages for retail investors. For one, investors get the enhanced liquidity of being able to trade these tokens on the blockchain. Second, they get access to the speed, efficiency, security, and transparency of blockchain technology. Third, they can trade tiny fractional shares of any company's stock that has been tokenized. According to Robinhood, tokenized stocks will modernize the traditional system of buying and selling stocks. If you've ever been frustrated by not being able to trade equities on the weekend or on holidays, then tokenized stocks represent a possible solution. In addition, once you have the token, you can then do different things with it that simply aren't possible in the world of traditional finance, all thanks to the power of decentralized finance. Robinhood is launching its tokenized stock offerings in Europe first, as a way of giving European investors access to the U.S. market. Robinhood says that more than 200 tokenized stocks and exchange-traded funds (ETFs) will be available for trading on its platform. In the future, U.S. investors might be buying tokenized stocks from Europe, Asia, or Latin America. Cons However, there are drawbacks to tokenized stocks. The primary goal is to give investors exposure to the price of the underlying real-world stock. They do not confer any traditional stock ownership privileges. There are no voting rights, for example. And if the stock pays dividends, you may not receive those dividends. You really have to read the fine print. For example, Robinhood says that its tokenized stocks will, indeed, pay dividends to investors. It depends on the blockchain smart contracts and how they are written for each token. Things get more complex once you move beyond publicly traded companies. For example, it is also possible to create tokenized equity in private companies. At its June investor event in France, Robinhood actually gave away tokens for OpenAI and SpaceX, arguably two of the hottest privately held tech companies right now. That caused a bit of an uproar. OpenAI, for example, immediately spoke out and said that these tokens are not OpenAI equity, and do not represent any type of ownership interest in the company. The company did not work with Robinhood on the launch of these tokens, and warned investors to be careful. Robinhood says that the ultimate goal is to open up the world of private markets to retail investors. Why should ultra-wealthy accredited investors be the only ones who can invest early in a hot tech company? Why should venture capitalists be the primary gatekeepers to these companies? That's potentially what makes tokenized stocks so revolutionary. They could lead to a transfer of power, money, and influence in the financial world. They could fundamentally change the way we think about the valuation of companies, both public and private. And they could forever blur the line between investing in public companies and investing in private companies. Outlook for American investors Right now, regulators in the U.S. are racing to keep up with the pace of crypto innovation. Until all the regulatory issues get worked out, these tokenized stocks from Robinhood will only be available to European investors. The good news is that several crypto platforms, in competition with Robinhood, are now working on tokenized stocks for U.S. investors. My prediction is that tokenized stocks will be mainstream in the U.S. by the end of next year. Now that the Trump administration has let the crypto genie out of the bottle, crypto innovation is taking place at an unprecedented scale and pace. Tokenized stocks are just the first in what should be a long line of new innovations for the individual investor. Should you buy stock in Robinhood Markets right now? Before you buy stock in Robinhood Markets, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Robinhood Markets wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's How "Tokenized" Stocks Are Revolutionizing Investment Access was originally published by The Motley Fool

Here's how 'tokenized' stocks are revolutionizing investment access
Here's how 'tokenized' stocks are revolutionizing investment access

USA Today

time3 days ago

  • Business
  • USA Today

Here's how 'tokenized' stocks are revolutionizing investment access

Tokenization has been one of the hottest buzzwords in the crypto industry for the past 12 months. Now we're finally starting to see what can happen when blockchain technology meets traditional stock-market investing. On June 30, Robinhood Markets shook up the financial world with the launch of tokenized stocks for retail investors. According to Robinhood Chief Executive Officer Vlad Tenev, these tokenized stocks represent the greatest innovation in capital markets in decades. But what, exactly, are they? And what do they mean for investors? What are tokenized stocks? Tokenization refers to the transformation of real-world assets into digital assets that live on the blockchain. Ownership in that asset is represented by a digital token that can be traded just like any crypto token. In this case, the real-world assets being transformed are stocks, and the place to trade them is on Robinhood's trading platform. For now, trading in these tokenized stocks will take place 24/5, but according to Robinhood, trading will soon be 24/7. It can be helpful to think of these tokenized stocks as digital twins. Robinhood buys a real-world stock, and then, with a little blockchain alchemy, transforms that into a digital token. In theory, this digital token will then mimic the price action of the real-world stock on a 1:1 basis. If the value of Company X goes up by 10% in one day, then the value of your token will go up by 10% as well. Pros Tokenization provides a number of advantages for retail investors. For one, investors get the enhanced liquidity of being able to trade these tokens on the blockchain. Second, they get access to the speed, efficiency, security, and transparency of blockchain technology. Third, they can trade tiny fractional shares of any company's stock that has been tokenized. According to Robinhood, tokenized stocks will modernize the traditional system of buying and selling stocks. If you've ever been frustrated by not being able to trade equities on the weekend or on holidays, then tokenized stocks represent a possible solution. In addition, once you have the token, you can then do different things with it that simply aren't possible in the world of traditional finance, all thanks to the power of decentralized finance. Robinhood is launching its tokenized stock offerings in Europe first, as a way of giving European investors access to the U.S. market. Robinhood says that more than 200 tokenized stocks and exchange-traded funds (ETFs) will be available for trading on its platform. In the future, U.S. investors might be buying tokenized stocks from Europe, Asia, or Latin America. Cons However, there are drawbacks to tokenized stocks. The primary goal is to give investors exposure to the price of the underlying real-world stock. They do not confer any traditional stock ownership privileges. There are no voting rights, for example. And if the stock pays dividends, you may not receive those dividends. You really have to read the fine print. For example, Robinhood says that its tokenized stocks will, indeed, pay dividends to investors. It depends on the blockchain smart contracts and how they are written for each token. Things get more complex once you move beyond publicly traded companies. For example, it is also possible to create tokenized equity in private companies. At its June investor event in France, Robinhood actually gave away tokens for OpenAI and SpaceX, arguably two of the hottest privately held tech companies right now. That caused a bit of an uproar. OpenAI, for example, immediately spoke out and said that these tokens are not OpenAI equity, and do not represent any type of ownership interest in the company. The company did not work with Robinhood on the launch of these tokens, and warned investors to be careful. Robinhood says that the ultimate goal is to open up the world of private markets to retail investors. Why should ultra-wealthy accredited investors be the only ones who can invest early in a hot tech company? Why should venture capitalists be the primary gatekeepers to these companies? That's potentially what makes tokenized stocks so revolutionary. They could lead to a transfer of power, money, and influence in the financial world. They could fundamentally change the way we think about the valuation of companies, both public and private. And they could forever blur the line between investing in public companies and investing in private companies. Outlook for American investors Right now, regulators in the U.S. are racing to keep up with the pace of crypto innovation. Until all the regulatory issues get worked out, these tokenized stocks from Robinhood will only be available to European investors. The good news is that several crypto platforms, in competition with Robinhood, are now working on tokenized stocks for U.S. investors. My prediction is that tokenized stocks will be mainstream in the U.S. by the end of next year. Now that the Trump administration has let the crypto genie out of the bottle, crypto innovation is taking place at an unprecedented scale and pace. Tokenized stocks are just the first in what should be a long line of new innovations for the individual investor. Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Robinhood Markets right now? Offer from the Motley Fool: Before you buy stock in Robinhood Markets, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Robinhood Markets wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025

GST dept cancels Awadh Enterprises registration in shell company scam
GST dept cancels Awadh Enterprises registration in shell company scam

Time of India

time22-05-2025

  • Business
  • Time of India

GST dept cancels Awadh Enterprises registration in shell company scam

Nagpur: As the crime branch of Nagpur police investigates the alleged shell company scam running into hundreds of crores, the Goods and Services Tax ( GST ) department has cancelled the registration of Awadh Enterprises, one of the two companies in whose name fake bills were reportedly issued. Sources say the registration was cancelled ab initio. The initial probe by police also shows that the invoices issued by these companies were used to claim fake input tax credit (ITC) under the GST regime. Now, since the registration has been cancelled ab initio, all the companies that claimed ITC based on invoices by Awadh Enterprises will have to pay taxes instead, said sources. This is because, since the registration was cancelled from the beginning, even the ITC claimed by other companies will stand null and void, explained a source. ITC is a mechanism put in place in any indirect tax system to avoid cascading effect. For example: Company X makes furniture by buying raw wood from Company Y. The tax component paid by Company X at the time of purchasing wood as an input from Company Y for making furniture will be proportionately reduced in the former's GST liability on selling furniture. This is because tax on raw wood, which is the input, is already paid. This is known as ITC, which can be used to adjust final GST liability. However, often fake purchase bills are issued to claim ITC fraudulently. This is done by giving a cut to the entity that issues the bills, explained the source. Now, with Awadh Enterprises' registration gone, the department will be recovering tax from an array of entities who had claimed ITC. The issue was flagged off by the state GST department to its counterparts at the Centre, which has cancelled the registration. Awadh Enterprises comes under the state GST department's Kalmeshwar range. However, the registration details of the other company — Kshitij Enterprises — are not available with the state GST department. The crime branch, which is investigating the case, is yet to send an intimation from its side, said sources. The investigation into the tax fraud and determination of the tax liability can only be done either by the state or central GST department. However, it is learned that neither of the departments has yet received any communication from the police. It is expected in due course because the tax aspect can only be probed by the GST department, while the police can investigate the fraud, said sources.

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