Last month, South Africa witnessed a quiet but significant financial shift. Luno, the UK-based cryptocurrency and digital investment platform with a strong African presence, opened a new gateway: tokenised US stocks and exchange-traded funds (ETFs).
For as little as R20, South Africans can now seamlessly buy fractions of global giants like Microsoft, Meta, Apple, and Alphabet directly in rands without waiting for US markets to open.
The response was immediate. Over 10,000 South Africans bought tokenised shares through the Luno app in its first month alone.
The surge reflected curiosity and a strong desire for affordable access to global markets, reinforcing that tokenisation could become the most notable change in South African investing since the arrival of low-cost trading platforms.
Christo de Wit, Luno’s country manager for South Africa, captured the frustration of the old system when he said:
“Until now, access to global financial markets has been locked behind red tape and legacy systems. With tokenised stocks, we offer South African investors easy access to global investments any time of the day or night.”
What tokenisation actually means
At its core, tokenisation is the creation of digital representations of real-world assets (RWAs). These could be property deeds, cars, or—in this case—shares in global corporations.
Luno’s product doesn’t give investors the actual Apple or Alphabet shares themselves, but rather blockchain-based tokens that mirror their value.
Behind the scenes, regulated brokers in the United States buy and hold the actual securities, while the digital tokens are issued and traded on platforms like Luno.
The result is a financial instrument that behaves much like the real thing but with added advantages: lower fees, near-instant settlement, and the ability to own fractions of expensive stocks.
Instead of needing R4,000 for a single Apple share, an investor can now buy a small portion with pocket change, democratizing access to markets once reserved for wealthier individuals or institutions.
The tokens are also convenient because they can be transferred between wallets. A tokenised Apple share, or xAPPL, can move across blockchain addresses as easily as sending a message without relying on intermediaries like banks or traditional brokers. That kind of liquidity has become a key selling point for early adopters.
Luno’s strategy and partnerships
Luno’s entry into tokenised equities was not a solo act. The company partnered with Kraken’s xStocks product and Backed Finance, two established players in the global tokenisation ecosystem.
Together, they created a pipeline in which South African investors’ rand deposits are converted into US dollars, used to purchase real shares through regulated brokers, and then mirrored by digital tokens issued on the blockchain.
Marius Reitz, Luno’s general manager for Africa and Europe, noted why this structure matters. He explained that separating duties between brokers, custodians, and token issuers ensures that real shares remain safe in regulated custody accounts even if a partner company collapses. The model, in theory, makes tokenised investing both transparent and secure.
The collaboration also allows Luno to scale quickly. At launch, South Africans could buy 44 tokenised stocks. Within weeks, the list expanded to over 60, including ETFs such as the S&P 500. Reitz noted that customer interest has grown steadily weekly, with the S&P 500 emerging as one of the most popular choices.
By charging a flat 1 per cent fee on trades, the platform positioned its pricing as transparent, particularly when compared with the hidden spreads and conversion costs South Africans often face when investing offshore.
Meanwhile, introducing tokenised equities places Luno in direct competition with other local players. VALR, another South African crypto platform, offers a handful of tokenised stocks, but its range remains limited compared to Luno’s.
Beyond crypto platforms, the product indirectly challenges wealthtech firms like EasyEquities and Satrix, which focus on traditional equities and ETFs but cannot match the always-on nature of blockchain trading.
Their ambitions also stretch beyond South Africa. While the product is currently limited to local users, plans are underway to extend tokenised equities to Nigeria and other African markets soon. It could create a new regional standard for cross-border retail investment if successful.
The appetite certainly exists. South Africa remains one of the continent’s most active crypto markets, with over five million citizens owning digital assets. Market studies predict that digital asset ownership will continue to rise nearly eight per cent annually through 2031, creating fertile ground for tokenisation to take root.
Regulatory hurdles facing the development
Despite its appeal, tokenisation inhabits a regulatory no-man’s land. Traditional equities are covered by securities laws that enforce investor protections and mandate transparency.
Tokenised stocks, by contrast, are classified as digital tokens rather than conventional securities. That distinction means they do not always carry the same rights—such as voting or shareholder privileges—nor do they fit neatly into existing tax regimes.
South Africa’s Financial Sector Conduct Authority (FSCA) has already begun licensing crypto asset providers, a step toward clarifying the sector. But the country’s tax authority, SARS, has struggled to keep up.
As of last month, only 17,000 of the nation’s six million crypto holders had declared their assets for taxation. Tokenised stocks, straddling the line between securities and digital assets, will likely make enforcement even trickier.
Regulators worldwide share these concerns. The World Federation of Exchanges has warned that tokenising traditional assets could undermine regulators’ ability to safeguard consumers.
The fear is that while tokenisation opens new doors for financial access, it might also open new loopholes for misconduct, money laundering, or tax evasion.
Luno, for its part, insists it is committed to compliance. “We are a regulated financial service provider in South Africa.”
Reitz said. “Any product we offer our customers must comply with regulations, or we risk losing our licence. There must be a balance between investor protection, which is of paramount importance, and innovation.”
However, the rapid adoption of tokenised stocks suggests a broader cultural shift in how South Africans think about money and investing.
For years, exposure to global companies was something only pension funds, wealthy individuals, or highly motivated retail traders could pursue. Tokenisation has made it as simple as opening an app and setting aside spare change.
That accessibility also aligns with generational trends. Younger investors, already comfortable with digital assets like Bitcoin and Ethereum, see tokenised stocks as a natural extension of their financial habits.
The ability to trade fractions of a Tesla share in real time carries the same appeal as buying small amounts of cryptocurrency—a familiar blend of flexibility, affordability, and liquidity.
Yet the transition is not without risks. Tokenised assets may be easier to access, but they lack some of the safeguards of traditional securities.
And while instant, round-the-clock trading is attractive, it may encourage speculative behaviour that undermines long-term financial planning.
But for now, Luno’s move into tokenised US equities underscores both the promise and the complexity of financial innovation in emerging markets.
On one hand, it provides South Africans with unprecedented access to global wealth-building opportunities. On the other hand, it challenges regulators to rethink how traditional frameworks apply to a borderless, digital-first financial system.
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