Karla Barker 
A new research report from Tiger Research warns that the U.S. Securities and Exchange Commission’s recent move to let third parties list tokenized stocks could cause two major structural problems: liquidity fragmentation and revenue fragmentation.
Ryan Yoon, Tiger Research’s director and head of research, explained on Friday that as capital moves from centralized exchanges onto multiple blockchain platforms, liquidity gets spread thin. He described this as a serious threat to traditional finance, which relies on consolidated, centralized liquidity.
How fragmentation happens
When third parties tokenize the same stock across different blockchain networks and decentralized platforms, trading volume and order flow that would normally gather on one exchange—like the NYSE or Nasdaq—instead scatters across many venues. This dispersion makes markets less efficient and harder to regulate.
The research came just five days after the SEC announced its “innovation exemption” on Monday, which permits third-party exchanges to list tokenized stocks without getting the issuer’s approval. The full details of what is and isn’t allowed have not been finalized yet. SEC Commissioner Hester Peirce said on Thursday that any exemption would be “limited in scope,” only allowing digital versions of stocks that investors can already buy in secondary markets.
Revenue fragmentation is another risk
Yoon pointed out that revenue fragmentation follows directly from market fragmentation. When tokenized stocks trade on multiple platforms in broken-up form, financial revenues that would normally go to domestic exchanges end up flowing offshore. That has direct consequences for a country’s financial competitiveness.
This capital fragmentation is already happening. Real-world asset open interest on the Hyperliquid decentralized exchange hit an all-time high of $2.6 billion this week. Yoon concluded that this shift “poses the deepest strategic dilemma for incumbent financial institutions and regulators alike.”
Maja Vujinovic, CEO of digital assets at FG Nexus, also warned that markets could split into “disconnected pools.” That could create dangerous price tracking errors and shadow-shorting vulnerabilities if there aren’t enough localized buyers to stabilize a specific token’s price.
Currently, tokenized stocks make up just 4.4% of total RWA onchain value, according to RWA.xyz.
But there are practical benefits too
Despite these risks, many argue tokenized stocks offer practical market benefits. The Blockchain Council notes faster settlement, fractional ownership, lower transaction costs, and the potential for round-the-clock trading. Global accessibility also lets non-US investors gain exposure to high-demand US stocks without hitting local brokerage limitations.
Brian Vieten, a senior research analyst at Siebert Financial, said, “We believe this will accelerate the transition of the US financial system from legacy rails to onchain blockchain-based rails.” He added that a portion of this flow would likely end up on high-quality blockchain networks like Bitcoin and Hyperliquid.
So while the SEC’s exemption opens new doors for tokenized stocks, it also brings real structural concerns that regulators and traditional finance will need to address.