What are the common challenges startups face in equity tokenisation?

The most common challenges include navigating FCA regulatory requirements, selecting the right tokenisation platform, structuring the legal framework for tokenised equity, educating investors unfamiliar with digital securities, and ensuring compliance with the UK Digital Securities Sandbox rules.

What are tokenisation platforms and how do they work?

Tokenisation platforms are regulated technology providers that convert equity or other assets into digital tokens on a blockchain or distributed ledger. In the UK, platforms operating under FCA oversight include those participating in the Digital Securities Sandbox. They handle the technical issuance, custody, and transfer of tokenised securities.

What financial insights should founders know before tokenising equity?

Founders should understand the cost structure of tokenisation (legal, platform, and compliance fees), the valuation implications of fractional ownership, how tokenised equity differs from traditional equity crowdfunding, and the tax treatment of digital securities under UK law.

What investor strategies apply to tokenised equity?

Investors in tokenised equity can benefit from fractional ownership of high-value assets, improved liquidity through secondary market trading on regulated platforms, portfolio diversification across early-stage UK startups, and participation in deals previously accessible only to institutional investors.

What is the UK regulatory landscape for equity tokenisation?

The UK regulatory landscape is governed primarily by the FCA (Financial Conduct Authority) and HM Treasury. Key frameworks include the Financial Services and Markets Act 2023, the Digital Securities Sandbox (DSS), and ongoing FCA consultations on the treatment of tokenised securities. The UK is positioning itself as a global leader in regulated digital securities.

What is equity tokenisation?

Equity tokenisation is the process of converting ownership rights in a company into digital tokens recorded on a blockchain or distributed ledger. These tokens represent shares or equity stakes and can be transferred, traded, or held digitally, subject to regulatory compliance. In the UK, tokenised equity is treated as a regulated financial instrument under FCA oversight.

The Real Signal for the UK Is That Tokenised Stock Has Stopped Being a Curiosity as Binance Research Maps a $2 Trillion Equity Wave.

Shawn Jhanji
Jun 6
5 min read

A research note published this week by Binance Research has put a number on something the tokenisation sector has been figuring out for two years. The report argues that crypto exchanges could route around US$2 trillion of new capital and close to 300 million new investors into global equity markets by 2031, with a bull case of US$5 trillion in annual incremental equity flows over the next five years.

For a UK audience of founders and investors, I believe the headline figure is the least interesting part but what does catch the eye is that tokenised equity has quietly crossed the line from experiment to distribution channel and the question is not now whether the rails work, but who will end up controlling them.

What the report actually says

The Binance Research frames exchanges as a distribution layer for people who already hold digital assets but lack convenient access to major stock markets. Close to 93 per cent of Binance stock trading users come from emerging markets, where high brokerage costs, limited foreign market access and banking friction have long kept ordinary savers out of global equities. The report estimates that settling stock trades in stablecoins could remove an average of 3.6 per cent and roughly US$40 per transaction in cross border off ramp costs, while allowing round the clock trading through the same account a user already holds for crypto.

The firm is careful to caveat its own numbers. The projections are not forecasts or investment advice, and adoption will depend on user eligibility, regulation, custody, market depth and exchange support. Those five conditions are not footnotes. They are the entire game, and they are precisely the areas where the UK has spent the past year building.

Why this matters beyond the crypto press

It would be very easy to file this under retail crypto 'not for me' froth and move on and that would be a mistake. If we strip away the exchange branding and the core claim is structural: it's clear that the cost, speed and reach of equity distribution are being rewritten rapidly by tokenisation and stablecoin settlement, and the first wave of demand is coming from markets that the traditional brokerage industry didn't serve particularly well.

Tokenised equities crossed US$960 million by March 2026 which is still small against the wider tokenised treasury market that dominates the real world asset category but the direction of travel and current trends are a significant pointer. BlackRock, Franklin Templeton, Ondo Finance, DTCC and Euroclear have all expanded their roles in tokenised securities over the past year. When a research desk owned by the largest exchange in the world models a multi trillion dollar distribution opportunity, it is not predicting the future so much as describing the infrastructure already being laid.

Here in the UK, the relevance is competitive rather than abstract. Britain has its own tokenisation architecture taking shape, from the FCA and Bank of England joint roadmap for wholesale markets to the PISCES regime for private company shares and the finalised fund tokenisation rules. This Binance report is another reminder that the global market will not wait for any single jurisdiction to feel ready and ultimately, that the capital, users and liquidity will gather wherever the rails are open, the rules are legible and the cost of access is lowest.

The founder angle, handled carefully

This report does draws a firm line between two debates that are often muddled together. One is whether retail investors should be able to buy private company equity. The other is whether founders can reach the right qualified investors more efficiently, and whether the cost and friction of raising and managing capital can be reduced. The report sits squarely in the public, listed equity world, and nothing appears to argue for throwing open private markets to retail money. . . . . . just yet!

But the infrastructure story does carry across the boundary, and that is where founders should pay attention. The same settlement rails, custody arrangements and tokenisation standards that make it cheaper to distribute a tokenised public stock to a saver in Lagos or Manila are the rails that, within whatever regulatory perimeter applies, could one day broaden the pool of authorised and self declared investors a UK founder can reach for tokenised private equity. The cost curve being bent for retail equity distribution is the same curve that sits underneath the economics of a private raise. When 3.6 per cent and US$40 come out of a cross border transaction, that efficiency does not respect the line between public and private. It accrues to whoever builds on the rails.

There is a control dimension too. A market where tokenised equity distribution is cheap, programmable and global, is a market where the operational drag of cap table management, secondary liquidity and investor onboarding falls. For a founder, lower friction in those layers is what makes alternatives to the traditional Series A, B and C treadmill thinkable. PISCES enabled secondary trading of tokenised private shares is the obvious UK expression of that idea. The Binance numbers are about public stock, but they describe a world in which the plumbing for all of this is being mass produced and connected now.

So what comes next?

The honest reading is that this is a projection from an interested party, and the bull case in particular should be treated as a marketing argument as much as a forecast. Exchanges have every incentive to talk up a future in which they sit at the centre of equity distribution. The five conditions that Binance lays out, eligibility, regulation, custody, market depth and exchange support, are exactly where the projection could stall.

At the same time, the structural claim holds even if the numbers do not.

Tokenised equity has stopped being a demo and has become a distribution channel with real users, real settlement and real cost advantages, where the centre of gravity is shifting toward those who own the rails. For UK founders and investors, the takeaway should not be to chase the headline figure but to understand that the architecture of how equity reaches investors is being rebuilt in public, in plain sight and that the country with the clearest rules and the most open infrastructure will capture a disproportionate share of it.

Britain certainly has the regulatory pieces in motion and the work now is to make sure the rails it is building are the ones founders and investors actually want to stand on.

Key Takeaways

Binance Research projects crypto exchanges could channel around US$2 trillion and close to 300 million new investors into global equities by 2031, with a US$5 trillion annual bull case.
The first wave of demand is from emerging markets, where 93 per cent of Binance stock trading users sit, driven by lower cost and round the clock access via stablecoin settlement.
Tokenised equities crossed US$960 million by March 2026, small but growing, with BlackRock, Franklin Templeton, Ondo Finance, DTCC and Euroclear all expanding their roles.
The projection is from an interested party and depends on eligibility, regulation, custody, market depth and exchange support, the same conditions the UK is now building around.
For founders, the signal is infrastructural: the rails making public tokenised stock cheaper to distribute are the rails that could one day reduce the cost and friction of a tokenised private raise.