By James Royal, Ph.D., Bankrate.com

The cryptocurrency industry has lately begun to heavily promote tokenized stocks, but what exactly are they? More importantly, what advantages do tokenized stocks offer — especially when investors already have safe, no-cost fractional share trading at many brokers?

A tokenized stock is a fancy way of saying that ownership of a stock can be transferred via blockchain, the technology behind cryptocurrency. Tokenizing, or digitizing, assets such as stocks, ETFs and other securities allows them to be traded on a specialized digital exchange and potentially directly between investors without the need for an exchange. These tokens are held in a digital wallet, much as crypto coins are, similar to a traditional brokerage account.

“The news cycle for crypto is all about representing traditional financial assets on a blockchain,” says Hilary Allen, professor, American University Washington College of Law. But Allen points out that investors and financial markets will endure major costs for doing so: “There are a lot of protections that are given up by this move.”

In order to establish a tokenized stock, these steps are needed:

— Taking custody of the asset: The asset that will be tokenized needs to be held in custody by a custodian, whose job is to safeguard it on behalf of the token creator.

— Creating the token: A financial institution such as an investment bank or fintech company then creates the digitized token, which corresponds to the asset in custody.

— Setting up smart contracts: Each token is programmed with self-executing smart contracts that give the token’s owner the same rights as stock ownership, including dividend distributions and voting rights, among others.

Once the stock is tokenized, traders can exchange it among themselves on crypto platforms, other decentralized finance platforms or even potentially a traditional stock brokerage. For example, crypto exchange Kraken has created tokenized stocks that it calls xStocks, and now allows trading in 60 major stocks. Meanwhile, brokerage Robinhood launched token trading in the European Union in June, offering access to more than 200 U.S. stock and ETF tokens.

Asset managers BlackRock and Franklin Templeton already offer tokenized money market funds. Goldman Sachs and BNY are teaming up to launch their own tokenized money market funds, too. More firms are exploring the idea of tokenized stocks.

In short, you could think of a tokenized stock as one that trades via blockchain. So what’s the big deal for individual investors? The cryptocurrency industry is breathlessly hyping this as a huge leap forward – as it has done for crypto coins – but the benefits are modest for individual investors, especially buy-and-hold types, and the risks of tokenized stocks are high. In fact, the best stock brokers already offer many of these same benefits to investors at no cost.

The crypto industry touts the following benefits of tokenized stock trading, many of which are already features at top brokers or may soon be features.

Benefits of tokenized stocks

— Increased accessibility through fractional shares: Tokenized stocks let investors trade portions of a share, meaning that high-priced stocks are accessible to even those with a little money.

— Lower cost: The crypto industry touts the potentially lower cost of transactions by eliminating intermediaries via blockchain.

— Transparency: The industry says thatby recording ownership on the blockchain, tokenization ensures that ownership is established.

— Security: Proponents say that blockchain-enabled trading also increases security because ownership is irrevocably established on the blockchain.

— 24/7 trading: Because tokenized stocks are held on a blockchain, they can be traded at any hour.

— Immediate settling of trades: Proponents also point to the immediate settling of trades via tokenized stocks, in contrast to next-day settlement in the U.S.

— More direct access between investors and firms: Tokenization may bypass existing financial intermediaries, letting companies raise money more directly from investors.

Others note the serious risks in tokenizing stocks, particularly in the area of investor protection.

Risks of tokenized stocks

— Potentially irrevocable transactions: Like cryptocurrency transactions, a tokenized stock transaction may be irrevocable. Once it’s done, it’s done, and it may be all but impossible to undo.

— Uncertain legal protections: The legal treatment of tokenized stocks is way behind where the crypto industry is trying to go, exposing investors to plenty of risks. For example, who is considered the issuer of a tokenized stock: the firm that tokenized it or the stock’s original issuer? What happens if an asset is hacked?

— Inflexible smart contracts: Smart contracts programmed into tokenized stocks will not cover all circumstances, says Allen. “It’s not clear how they’ll operate in unexpected environments.”

— Circumventing investor protections: Private investments are private partially to protect investors, not merely to limit investments to the well-heeled, but tokenizing stocks can allow financial players to get around the rules. “It’s absolutely built as an end run around securities laws,” says Allen. “Crypto is built as an end run around securities laws.”

— Loss of trust in American financial markets: One of the potential long-term effects of not enforcing existing securities laws is the erosion of trust in American capital markets. If securities laws aren’t enforced or are enforced inconsistently, then markets simply become a place to rip off investors.

Bankrate reached out to Kraken and Robinhood for further comment but has not heard back.

What’s behind the push for tokenized stocks?

The crypto industry and some traditional financial institutions have talked a big game about tokenization of stocks and some players have moved toward tokenization. But what’s in it for individual investors? Many of tokenization’s supposed benefits touted by the crypto industry are already available for individual investors in the current system.

— Fractional shares already exist: Individual investors can already access fractional shares — on thousands of stocks and ETFs — at the best brokers for fractional shares.

— Stock trading is already commission-free: For individual investors, trading stocks is already free at every major online broker, so there’s no added benefit to using tokenized stocks.

— Transparency and security: Existing brokers already have high levels of security with a proven security process. In fact, it’s the crypto exchanges and other DeFi platforms that have been beset by lax security, fraud and theft.

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— After-hours trading: Many brokers already offer after-hours, overnight and pre-market trading on existing stocks. While this is not 24/7 trading, brokers have been expanding access in recent years. Moreover, all-hours access to trading does not benefit long-term investors, who build wealth through the long-term success of the underlying business. Study after study shows that active trading underperforms passive investing.

— “Democratization” of investing: Proponents of tokenization say that it gives access to private investments that are being hoarded by the wealthy. But giving a means to trade a stock — tokenizing it — does not mean that anyone will want to sell it to you. In fact, you should be skeptical when someone wants to sell you what they say is a great investment. (If it’s such a great investment, why are they letting you in on it? It’s not out of the kindness of their heart.)

So, while tokenization may offer a few incremental benefits to individual investors, albeit with significant risks, what’s the real driver of tokenization? Who is actually going to benefit here? It’s the crypto industry trying to make inroads into traditional finance, say experts.

“The crypto industry is waging a multi-pronged battle to get integrated into the financial system,” says Allen. The industry is working to “attract deep pockets” and bring more money into the fold, and tokenized stocks are part of that push, she explains.

So much of the crypto world is about hyping digital currency as “the next big thing.” Part of that process is projecting bombastic price targets for Bitcoin and other cryptocurrencies, ones that are always rising over time. Such hype can make cryptocurrency seem inevitable.

As with cryptocurrency, one of the biggest use-cases for stock tokenization is (illegally) getting around existing laws (in this case, securities laws). So the full-bore adoption of stock tokenization has many potentially destructive effects, including the erosion of investor protections and robust securities laws that protect financial markets. Without these laws, it’s “scammer take all.”

“Investors lose the benefit of the securities laws,” says Allen. She points out that what the crypto industry wants to run roughshod over are the very laws that they claim are roadblocks to their profits. ”We saw what happened in the 1920s and the lack of securities laws.”

Bottom line

Tokenization presents significant risks to individual investors and the financial markets as a whole, while offering few benefits to investors that don’t already exist. Those who try out tokenized stocks should remain wary of their many risks amid an uncertain legal framework.

©2025 Bankrate.com. Distributed by Tribune Content Agency, LLC.

By STAN CHOE, Associated Press Business Writer

NEW YORK (AP) — Wall Street is rallying on Friday after the head of the Federal Reserve indicated cuts to interest rates may be coming in a highly anticipated speech, though he gave no clear clue about when.

The S&P 500 jumped 1.3% and erased all of its loss for the week. It’s coming off its fifth straight modest loss after setting an all-time high last week. The Dow Jones Industrial Average was up 649 points, or 1.4%, as of 10:05 a.m. Eastern time, and the Nasdaq composite was 1.3% higher.

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The hope among investors had been that Jerome Powell would hint in his speech at a central bankers’ symposium in Jackson Hole, Wyoming, that cuts to interest rates may be imminent. Wall Street loves lower rates because they can give a boost to the economy and to investment prices, even if they risk worsening inflation at the same time.

President Donald Trump has angrily been calling for lower rates, often insulting Powell while doing so. And a surprisingly weak report on job growth this month pushed many on Wall Street to assume cuts are coming as soon as the Fed’s next meeting in September.

But Powell did not commit to any kind of timing in his speech on Friday, saying only that the Fed was prepared to act if necessary, as he has for much of this year while the Fed kept interest rates steady. The Fed’s two jobs are to keep the job market healthy and to keep a lid on inflation, and helping one by moving interest rates often means hurting the other.

Powell said the job market looks OK at the moment, even if “it is a curious kind of balance” where fewer new workers are chasing after fewer new jobs. Inflation, meanwhile, still has the potential to push higher because of Trump’s tariffs.

In sum, Powell said that “the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.”

Treasury yields tumbled in the bond market after the release of the text of Powell’s speech.

The yield on the 10-year Treasury fell to 4.27% from 4.33% late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the Fed will do with its main interest rate, sank to 3.71% from 3.79%.

On Wall Street, Ross Stores rose 1.7% after the retailer reported a stronger profit for its latest quarter than analysts expected. CEO Jim Conroy said sales trends picked up at the end of the quarter in July following a lull in June.

Shares of Nio, a Chinese electric-vehicle maker, that trade in the United States climbed 9.8% after it began pre-sales of its flagship premium SUV model, the ES8.

Nvidia rose 0.9% to trim its loss for the week. The company, whose chips are powering much of the world’s move in to artificial-intelligence technology, has seen its stock struggle recently amid criticism that it and other AI superstars shot too high, too fast and became too expensive.

Nvidia’s CEO, Jensen Huang, said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. The chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia’s top semiconductors today, which cannot be sold to China due to U.S. national security restrictions.

In stock markets abroad, Germany’s DAX returned 0.1% after government data showed that its economy shrank by 0.3% in the second quarter compared with the previous three-month period.

Indexes rose across much of Asia, with stocks climbing 1.4% in Shanghai and 0.9% in South Korea.

AP Writers Teresa Cerojano and Matt Ott contributed.

Russia’s top diplomat said Friday there are no plans for a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to discuss their three-year war, days after U.S. President Donald Trump said he had begun arrangements for them to sit down together.

“There is no meeting planned” between the Russian and Ukrainian leaders, Russian Foreign Minister Sergey Lavrov said in a taped interview for NBC’s Sunday show “Meet the Press with Kristen Welker.”

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Trump said in a social media post Monday that he had spoken to Putin and set in motion arrangements for a summit at a location to be decided. Trump added he would join them for a trilateral meeting afterward.

Uncertainty has grown in recent days about Moscow’s commitment to U.S.-led peace efforts, as Russian officials have raised objections about cornerstones of the nascent proposals.

Lavrov said Thursday that Putin is ready to meet with Zelenskyy to discuss peace terms, but only after key issues have first been worked out by senior officials. That could involve a protracted negotiating process because the two sides remain far apart.

Ukraine wants Western security guarantees to deter any postwar Russian attack, and U.S. and European officials are scrambling to come up with detailed proposals of how that might work. But Lavrov said earlier this week that making security arrangements for Ukraine without Moscow’s involvement was pointless.

On Thursday, a major Russian drone and missile attack on Ukraine struck an American-owned electronics plant, despite Trump’s criticism of Putin for continuing to bomb Ukrainian targets while talking peace.

Europe’s chief diplomat warns of Putin ‘trap’

The European Union’s foreign policy chief said Friday that the possibility of Ukraine ceding land to Russia as part of a peace deal to end their three-year war is “a trap” set by Russian President Vladimir Putin.

The Russian leader is demanding Ukrainian concessions in return for halting his army’s invasion but granting him those demands would amount to rewarding the country that started the fighting, Kaja Kallas said.

The recent talk about handing Putin concessions is “exactly the trap that Russia wants us to walk into,” Kallas said in an interview with the BBC.

“I mean, the discussion all about what Ukraine should give up, what the concessions that Ukraine is willing to (make), whereas we are forgetting that Russia has not made one single concession and they are the ones who are the aggressor here, they are the ones who are brutally attacking another country and killing people,” she said.

“Russia is just dragging feet. It’s clear that Russia does not want peace,” Kallas said. “President Trump has been repeatedly saying that the killing has to stop and Putin is just laughing, not stopping the killing, but increasing the killing.”

Ukraine strikes a Russian oil pipeline

Ukraine, meanwhile, has hit back at Russia with long-range weapons that are targeting infrastructure supporting Moscow’s war effort. It has hit oil refineries, among other targets, and Russian wholesale gasoline prices have reached record highs in recent days.

Ukrainian servicemen of the 44th artillery brigade fire a 2s22 Bohdana self-propelled howitzer towards Russian positions at the frontline in the Zaporizhzhia region, Ukraine, Wednesday, Aug. 20, 2025. (AP Photo/Danylo Antoniuk)

Ukrainian forces on Friday targeted the Druzhba oil pipeline in Russia, hitting the Unecha oil pumping station in the Bryansk region, according to the commander of Ukraine’s Unmanned Systems Forces, Robert Brovdy, also known as Magyar.

The Druzhba pipeline starts in Russia and takes oil through Belarus and Ukraine to Slovakia and Hungary. In Russia, a section of it goes through the Bryansk region and the Unecha district.

Ukraine fired HIMARS rockets and drones at the region in a combined attack, Bryansk regional Gov. Alexander Bogomaz said in a Telegram post.

The pipeline supplies Hungary with more than half of its crude oil. Hungarian Foreign Minister Péter Szijjártó wrote on Facebook on Friday that the Druzhba pipeline had been attacked “for the third time in a short time.”

“This is another attack on the energy security of our country. Another attempt to drag us into war,” the minister wrote.

Hungary under Prime Minister Viktor Orbán has taken a combative stance toward both Kyiv and its EU backers while most EU countries have offered political, financial, and military support to Kyiv.

Orbán visited Moscow to meet with Putin last year in a rare trip to Russia by a European leader.

Slovakia and Hungary are the only remaining EU member states still receiving oil from Russia. The other 25 stopped buying it as part of EU sanctions following Moscow’s full-scale invasion of Ukraine in 2022.

By WAFAA SHURAFA and SAM METZ, Associated Press

GAZA CITY, Gaza Strip (AP) — Israel’s defense minister warned Friday that Gaza’s largest city would be destroyed unless Hamas yields to Israel’s terms, as the world’s leading authority on food crises said the city was gripped by famine from fighting and blockade.

A day after Prime Minister Benjamin Netanyahu said he would authorize the military to mount a major operation to seize Gaza City, Defense Minister Israel Katz warned that it could “turn into Rafah and Beit Hanoun,” areas largely reduced to rubble earlier in the war.

“The gates of hell will soon open on the heads of Hamas’ murderers and rapists in Gaza — until they agree to Israel’s conditions for ending the war,” Katz wrote in a post on X.

Palestinians pray over the bodies of people who were killed in an Israeli military strike, during their funeral outside Shifa Hospital, in Gaza City, Friday, Aug. 22, 2025. (AP Photo/Abdel Kareem Hana)

He restated Israel’s cease-fire demands: the release of all hostages and Hamas’ complete disarmament. Hamas has said it would release captives in exchange for ending the war, but rejects disarmament without the creation of a Palestinian state.

Netanyahu on Thursday said he had instructed officials “to begin immediate negotiations” to release hostages and end the war on acceptable terms, Israel’s first public response to the latest ceasefire proposal.

With ground troops already active in strategic areas, the wide-scale operation in Gaza City could start within days.

Gaza City is Hamas’ military and governing stronghold, atop of what Israel believes is an extensive tunnel network. It is also sheltering hundreds of thousands of civilians and still houses some of the strip’s critical infrastructure and health facilities.

Hamas said earlier this week that it had agreed to a ceasefire proposal from Arab mediators, which if accepted by Israel could forestall the offensive. The parties do not negotiate directly and similar announcements have been made in the past that did not lead to ceasefires.

The proposal outlines a phased deal involving hostage and prisoner exchanges and a pullback of Israeli troops, while talks continue on a longer-term cease-fire. Israeli leaders have resisted such terms since abandoning a similar agreement earlier this year amid divisions within Netanyahu’s coalition and strong opposition from his right.

Many Israelis fear an assault could doom the roughly 20 hostages who have survived captivity since Hamas’ Oct. 7, 2023 terrorist attack. Aid groups and international leaders warn it would worsen Gaza’s humanitarian crisis.

Alaa Hassanein carries the body of his 4-year-old niece, Sara Hassanein, who was killed in an Israeli military strike on a school used as a shelter, outside Al-Shifa Hospital, in Gaza City, Friday, Aug. 22, 2025. (AP Photo/Abdel Kareem Hana)

Hamas has been designated as a terrorist organization by the United States, Canada and the European Union.

The logistics of evacuating civilians are expected to be daunting. Many residents say repeated displacement is pointless since nowhere in Gaza is safe, while medical groups warn Israel’s calls to move patients south is unworkable, with no facilities to receive them.

But Netanyahu has argued the offensive is the surest way to free captives and crush Hamas.

“These two things — defeating Hamas and releasing all our hostages — go hand in hand,” Netanyahu said Thursday while touring a command center near in southern Israel.

Since 251 people were taken hostage more than 22 months ago, ceasefire agreements and other deals have accounted for the vast majority of the 148 released, including the bodies of eight deceased hostages.

Israel has only managed to rescue eight hostages alive and retrieved the bodies of 49 others. Fifty hostages remain in Gaza, about 20 of whom Israel believes to be alive.

Airstrike hits area ahead of broader offensive

Gaza City’s Shifa Hospital said at least 17 Palestinians were killed Friday as Israel escalates its activity in the area in the lead-up to its broader planned offensive.

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An Israeli airstrike hit a school in Sheikh Radwan, a Gaza City neighborhood where tens of Palestinians shelter in makeshift tents in the schoolyard. It killed at least seven people, according to an eyewitness and hospital records.

Israel’s military said it wasn’t aware of a strike in the area but in a statement said troops were operating on the outskirts of Gaza City and in the Zeitoun neighborhood.

The strike is part of Israel’s ongoing push in Gaza City, where the military says it is operating and witnesses have reported intense bombardment in the days since Israel approved its plans to take the city.

Amal Aboul Aas, who is now sheltering in Gaza City after being displaced four times, said the explosions were so intense he couldn’t sleep, yet she couldn’t leave either.

“We do not have the money, the resources, or the energy to evacuate again. I just wish for a quick death right where I am here because I am not going anywhere. Eventually one of these missiles will hit me,” she told The Associated Press.

The Gaza Health Ministry said Thursday that at least 62,192 Palestinians have been killed in the war. Another two people have died from malnutrition-related causes, bringing the total number of such deaths to 271, including 112 children, the Health Ministry said.

The ministry is part of the Hamas-run government and staffed by medical professionals. It does not say whether those killed by Israeli fire are civilians or combatants, but it says around half were women and children. The U.N. and many independent experts consider its figures to be the most reliable estimate of wartime casualties. Israel disputes its toll but has not provided its own.

Hamas started the war when they attacked Israel on Oct. 7, 2023, killing some 1,200 people, mostly civilians, and taking hostages.

Metz reported from Jerusalem. Melanie Lidman contributed from Tel Aviv, Israel.