Community Trust ScoreVerified
What happened
Can a tokenized Apple share really back a crypto margin loan? Bybit thinks so — and it’s already live.
Bybit has switched on tokenized shares from six major U.S. companies as eligible collateral for margin trading and loans. Nvidia, Apple, Tesla — those are the names getting attention. Retail and institutional investors can now pledge these blockchain-based equity tokens against Bybit’s trading and lending products, which is a pretty meaningful expansion of what counts as “acceptable collateral” on a crypto exchange. The move builds on Bybit’s earlier work with Backed, a firm that handles the actual tokenization process. Backed wraps the underlying securities 1:1, meaning each token is supposedly matched by a real share held in custody somewhere. That structure is what separates tokenized stocks from older, looser synthetic products — at least in theory.
Bybit isn’t alone here. Kraken and Bitget have both moved in the same direction.
Kraken’s acquisition of Backed in late 2025 was probably the loudest signal yet that major exchanges see tokenized equities as core infrastructure, not a gimmick. Kraken now accepts select tokenized stocks and ETFs as collateral for futures and margin trading. Bitget followed with its own push to support tokenized stocks as collateral, which basically confirms this is a competitive arms race now — every big exchange wants to offer more sophisticated, diversified instruments. The question is whether users actually want them, and at what scale.
The historical context
None of this came from nowhere. Binance started offering tokenized stock tokens back in 2020, letting users trade fractions of equities without ever touching the underlying shares. That experiment was short-lived in some markets due to regulatory friction, but it planted the idea firmly in the industry’s thinking. The logic was always the same: give crypto-native investors exposure to traditional assets without forcing them to open a brokerage account, deal with settlement delays, or navigate foreign ownership restrictions.
The closest historical parallel is probably the ETF boom of the early 2000s. ETFs democratized equity access in ways that seemed radical at the time — fractional exposure, intraday liquidity, lower minimums. Tokenized stocks are kind of trying to do the same thing, but layered on top of blockchain rails that allow 24/7 trading, programmable collateral, and near-instant settlement. The underlying mechanics are different, but the pitch to investors rhymes.
Traditional derivatives offered exposure without ownership too, but they didn’t claim to be backed by anything real. Tokenized stocks, when structured properly, do carry that 1:1 backing — which is meant to give investors a bit more comfort. Whether that comfort is fully warranted depends heavily on the custodian, the jurisdiction, and the legal enforceability of the claim. Details that, frankly, most retail users probably don’t dig into.
Why it matters
The numbers tell part of the story. The tokenized equities market sat at roughly $361 million in July 2025. It’s now around $1.72 billion. That’s a dramatic move in under a year — not quite explosive by crypto standards, but fast by any traditional finance metric. And it’s happening without a lot of mainstream fanfare, which is often how structural shifts begin.
For investors, Bybit’s collateral expansion means more flexibility. Instead of liquidating tokenized stock positions to free up capital for a trade, users can now pledge those positions directly. That’s real utility — it reduces friction and keeps portfolios more intact during volatile periods. Sophisticated traders will get this immediately. Less experienced users might not fully grasp the liquidation risks that come with using any asset as collateral, especially in a market that can move 20% in a day.
Regulatory scrutiny is probably coming. It’s murky right now. The blending of traditional securities with crypto trading infrastructure sits in an uncomfortable gray zone — one that U.S. and EU regulators haven’t fully mapped. Watch for guidance that specifically targets tokenized assets used as collateral, because that would change the calculus for exchanges fast. So far, nothing concrete has landed, but the market’s growth from $361 million to $1.72 billion in less than a year is the kind of number that tends to get regulators’ attention.
What to watch
A few things worth tracking closely.
First, whether the tokenized equities market breaks past $2 billion in total distributed value. Crossing that threshold would probably accelerate institutional interest and push more exchanges to build similar products. It’s not a magic number, but markets respond to milestones.
Second, regulatory moves in the U.S. and EU. Any new legislation or formal guidance specifically addressing tokenized assets as collateral could reshape how exchanges structure these products — or whether they can offer them at all in certain jurisdictions. No details on timing, and it’s unclear which regulator moves first.
Third, actual adoption rates on Bybit’s platform. The number of users actively pledging tokenized stocks for loans and margin trades will say a lot about whether demand is real or whether this is mostly an institutional play with thin retail uptake. Bybit hasn’t published those figures yet.
The Backed partnership is central to all of this. Backed’s custodial model — that 1:1 backing by underlying securities — is what makes the collateral credible enough for an exchange to accept it. Without that structure, the whole thing probably doesn’t work for risk-management purposes. Kraken acquiring Backed rather than just partnering with them suggests the infrastructure layer here is considered genuinely strategic, not interchangeable.
The tokenized equities market hit $1.72 billion.
