When you hear about tokenised stocks, it’s natural to think: “Is this safe?”

It’s the right question — and one every investor should ask before exploring this new era of digital investing.

At Altify, transparency and security come first. Tokenised stocks aren’t speculative crypto copies — they’re fully backed, regulated instruments that bring real-world shares into the digital world with the same standards you’d expect from traditional finance, but with the access and speed of blockchain.

Let’s break down how it works — and what makes it safe.

Understanding the Structure: Real Shares, New Technology

When you buy a tokenised stock on Altify, you’re getting exposure to a real share — say Tesla, Microsoft, or the S&P 500 ETF — that’s held by a regulated and licensed custodian.

Each token is created by Backed Finance, the issuer behind xStocks, and is minted only after the actual share has been purchased and locked away in a segregated, bankruptcy-remote custody account.

That means:

• Every token is 1:1 backed by the real stock.
  
  
• The shares are held off the issuer’s balance sheet, so they can’t be used for any other purpose.
  
  
• Even if the issuer were to fail, the underlying shares remain in the segregated account.
  

In simple terms: if a token exists, a real share sits safely behind it.

How Tokenised Stocks Differ from Traditional Shares

Tokenised stocks mirror the price of the real share — giving you the same economic exposure — but they’re not identical to holding shares via a traditional broker.

What you get:

• The same price performance and exposure to gains/losses.
  
  
• Fractional ownership — invest from as little as R150 / $10.
  
  
• Instant settlement and 24/7 trading.
  
  
• Access without needing offshore accounts, compliance red tape or currency conversions.
  

What you don’t get (for now):

• Voting rights.
  
  
• Shareholder privileges such as rights offerings, legal claims to the underlying company shares, any residual assets in the event of the underlying company’s liquidation or corporate action participation.
  
  
• Guaranteed dividend payouts (these may be passed through as stablecoins or token adjustments).
  

In other words: you get the performance and access of global stocks, but not the governance rights.

The Key Risks — and How Altify Manages Them

Like any investment, tokenised stocks carry risks. What matters is understanding them — and knowing what Altify and its partners do to mitigate them.

1. Market Risk
Stock prices can go up or down. Tokenisation doesn’t change that — your returns still depend on the performance of the underlying companies.

2. Liquidity Risk
Because tokenised markets are still growing, trading volumes can sometimes be lower than traditional stock exchanges. That can mean wider spreads or short-term price swings during volatile periods.

3. Tracking Differences
xStocks trade 24/7 — even when Wall Street is closed. This means temporary price gaps can appear but usually close once the underlying market reopens or redemption flows bring prices back in line.

4. Custody and Counterparty Risk
xStocks are issued by Backed Finance, which holds the underlying shares with regulated custodians in segregated, bankruptcy-remote accounts. If Backed ever faced insolvency, a third-party trustee and the custodian would manage the value transfer of the shares to token holders and recovery would follow Swiss legal processes.

5. Regulatory Risk
Tokenised stocks exist in a rapidly evolving regulatory landscape. Tokenised securities are a new concept, therefore rules around them continue to evolve globally and may be subject to change over time.Altify only operates within approved jurisdictions.

6. Technology Risk
Blockchain assets rely on smart contracts and network infrastructure. While Backed’s contracts are independently audited, and Altify uses institutional-grade Fireblocks custody, it’s still important to remember: technical risk, though small, exists in every digital system.

The Bottom Line

Tokenised stocks are redefining what ownership looks like in the digital age.
They come with clear, manageable risks — the same market risks as any equity investment, plus a few that come from using cutting-edge technology. But those risks are well understood, tightly controlled, and balanced by the benefits: accessibility, transparency, and speed.

For most South Africans, global investing has felt out of reach — not because of risk, but because of access.

Tokenised stocks solve that: they make it possible to hold the world’s best companies, securely, from your phone, in minutes.

By combining blockchain transparency, regulated custodianship, and institutional infrastructure, tokenised stocks ensure access from innovation.

Ready to explore? 

Log in to Altify and start building your portfolio today.