Definition ∞ Tokenized securities trading involves the exchange of digital tokens that represent traditional financial securities, such as stocks, bonds, or real estate, on a blockchain. These tokens are legally recognized as securities and are subject to relevant financial regulations. The blockchain infrastructure enables automated settlement, fractional ownership, and increased transparency. This method aims to modernize and streamline conventional securities markets.
Context ∞ The regulatory landscape surrounding tokenized securities trading is a critical and evolving area, with jurisdictions developing specific guidelines for their issuance and exchange. Discussions often focus on balancing the benefits of blockchain efficiency with investor protection and market integrity. Future developments include the integration of blockchain technology into existing financial market infrastructures and clearer international regulatory harmonization.
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