500,000 euros or a questionnaire: two access rules for tokenized stocks

Tokenized stocks are tokens that track the price of a real share, trade around the clock and fit into a wallet. The marketing addresses everyone. The offering documents do not. If you live in Germany, you run into two entirely different answers depending on the provider: with one, a retail client needs a financial portfolio of 500,000 euros; with another, a questionnaire is enough.

That difference is not buried in one firm's small print. It follows from the law under which a token is issued. We looked at the eligibility and risk documents of two providers that both show up in German search results, and put their terms side by side.

A stock token is a security, not a crypto-asset under MiCA

The starting point determines everything else. A token that tracks a share or a bond counts as a financial instrument for supervisory purposes and is treated under securities law, not under the MiCA crypto regulation. For investors that means the same regulatory machinery applies as for a certificate or a bond, with a prospectus, eligibility tiers and investor protection rules under the MiFID II markets directive.

That sounds like more protection, but in practice it often produces the opposite of what investors expect: because the hurdles for a public offer to retail clients are high, many issuers simply exclude retail clients in the European Union. An issuer that still wants to serve them needs a prospectus registered in the EU and an authorised firm to run the business. How far supervision now reaches is also visible in our report on the SEC exemption for tokenized US stocks.

Case one: at Ondo, retail clients in the EEA stay excluded

With around $4.0 billion in its own products, Ondo Finance ranks among the largest providers of tokenized financial assets; we put that scale and its market share in context on October 18 in our report on Ondo's market share in tokenized stocks. Its tokenized stocks follow the TSLAon naming pattern and are issued by a company in the British Virgin Islands.

The Ondo Stocks eligibility overview lists a line of its own: “Any Member State of the European Economic Area”. Germany is one of them. Anyone resident here may only subscribe to, mint or redeem these tokens if they qualify as a “professional client” under Annex II Section I of MiFID II or as a “qualified investor” under Article 2(1)(e) of the Prospectus Regulation (EU) 2017/1129.

Ondo names the thresholds that usually suffice. A private individual has to meet two of three conditions:

• a financial portfolio of 500,000 euros,
• ten significant transactions per quarter over the previous four quarters,
• one year of professional experience in the financial sector.

Companies face their own size criteria, such as a balance sheet total of 20 million euros or revenue of 40 million euros. Anyone who is restricted has to document and declare their eligibility to the issuer. For an ordinary retail investor in Germany, this offer is therefore closed.

Case two: xStocks via Kraken requires a questionnaire in the EEA

The second route runs through the xStocks token range, offered by Kraken among others. The terms appear in the provider's risk disclosure and in its help pages, and they look markedly different. Customers in the European Economic Area have to complete and pass a questionnaire before trading is enabled. The documents name no wealth threshold.

In exchange, the rules inside the EEA are tighter than outside. Once enabled, the tokens can only be bought, sold and exchanged with money, not with cryptocurrencies. Trading through the order books of the professional interface and through the programming interface stays closed to EEA customers; only the exchange function is open. Customers outside the EEA, by contrast, may also pay with crypto.

Three companies carry this structure, and the way they interlock is worth a look: the tokens are issued by Backed Assets (JE) Limited, a company in Jersey. They are offered to customers through Payward Digital Solutions Ltd., a Bermuda company licensed by the Bermuda Monetary Authority. The European securities business runs through Payward Europe Digital Solutions (CY) Limited, an investment firm authorised under MiFID II. The United States, Canada, the United Kingdom and Australia remain excluded.

What a stock token does not deliver: ownership, voting rights, cash dividends

One characteristic stays the same at both providers, and the marketing rarely dwells on it. The holder does not own the share. The xStocks risk disclosure puts it unambiguously: holders have no ownership of the underlying shares but benefit from price performance. There are no voting rights. Nor is there any claim to information from the company whose share is being tracked.

The dividend also arrives differently. Instead of a cash payment, it is automatically reinvested into further tokens of the same range; the balance in the wallet grows. The same mechanism applies at Ondo, although there US withholding tax reduces the amount first: dividends from US companies are docked 30 percent because the issuer sits in the British Virgin Islands. Under the double taxation treaty between Germany and the United States, the rate for German retail investors is 15 percent, and that portion can be credited against the flat-rate withholding tax.

If voting rights and a cash dividend are what you are after, the share in a brokerage account serves you better. If you are after the price performance and want to hold the token in your own custody, you find something here that a brokerage account does not offer. That distinction is the real decision, not the question of fees.

Issuer risk sits in Jersey, Bermuda and the Virgin Islands

Holding such a token means carrying two risks on top of each other: the price risk of the share and the risk of the companies standing behind it. The xStocks risk disclosure names the second part explicitly. If the custodian holding the securities for the issuer fails, access to the deposited shares can be delayed or become impossible, with a partial or total loss of the capital invested.

On top of that, none of these issuers is based in Germany. German deposit insurance does not apply, nor does an investor compensation scheme. Who the share is assigned to in the register if the intermediary fails depends on the structure in each individual case; we showed how thin this point can be using the example of registers and transfer agents for tokenized stocks.

A third point concerns the return itself: according to the documents, fees accrue under the respective base prospectus, which is why a token's performance does not match the share's performance over the same period. A deviation is built in; it is not the exception.

These five details decide whether an offer suits you

Both cases come down to the same questions. The answers are always in the offering documents, usually on a page called Eligibility, Risk Disclosure or base prospectus:

1. Is your country on the list of restricted countries? The entry often does not read “Germany” but “European Economic Area”. Search for the country name and you miss it.
2. Which eligibility tier does the issuer require? “Professional client” effectively shuts retail clients out. A questionnaire lets them in.
3. Who issues, and under which licence? Jersey, Bermuda or the Virgin Islands are not EU supervision. A prospectus registered in the EU and an authorised investment firm are a different level.
4. How does the dividend arrive, and what is left of it? Automatic reinvestment after deduction of a withholding tax is the norm, not a cash dividend.
5. Can you get out again? Redemption requires an identity check at both providers. Buy the token somewhere on the secondary market and fail that check, and you hold an instrument you cannot return.

The last point in particular is underestimated. Technically the purchase succeeds on a decentralised exchange within minutes; the way back can still be blocked. If you also want to post the tokens as collateral, read those terms separately; we described the clearance and its limits in our piece on tokenized stocks as collateral. Our comparison of regulated crypto exchanges gives an overview of providers with a European licence.

Tax follows German law, not the issuer's domicile

Wherever a token is issued, the tax liability stays with the investor in Germany. Beyond withholding tax on dividends, neither provider withholds any tax, not even on redemption. How gains from stock tokens are classified here, and when the one-year holding period matters at all, we took apart in our guide to the taxation of tokenized stocks in Germany.

What matters in practice is the point where many records fall apart: every exchange is a separate transaction with its own date and its own price. With a provider that only allows purchases with money inside the EEA, that is easier to trace than with a purchase routed across several tokens.

Who else offers tokenized stocks, and what stays open there

The market is bigger than these two cases. Several houses have launched ranges of their own, among them Securitize with twelve names at launch, which we described in our piece on the launch of tokenized stocks at Securitize. Large institutions, by contrast, are holding back.

For this comparison we deliberately included only the two providers whose eligibility rules can be fully documented from their own paperwork. For several others, the position for retail clients in the EEA could not be cleanly established on the day; in some cases the product page and the help page of the same house contradicted each other. That points to a rule which takes precedence over any comparison: what counts is the risk disclosure or the base prospectus, not the product page. Product pages go stale, prospectuses are updated.

Tokenized stocks: the eligibility page decides, not the fee

If you are considering a stock token in Germany, these three steps are the best way to work through it:

1. Read the eligibility page before the product page. Search the documents for “European Economic Area” and for “professional client”. If both appear, the offer is probably closed to you and you spare yourself the sign-up. Which providers work with a European licence instead is shown by our crypto exchange comparison.
2. Run the numbers against a brokerage account. Without voting rights and with a dividend automatically reinvested after withholding tax, the token is something other than the share. If you compare the two, take total costs and dividend treatment together; the terms are in our broker comparison.
3. Settle the exit beforehand. Before your first purchase, check which identity verification applies to redemption, and record every exchange with its date. Tools for that are in our overview of crypto tax tools and portfolio trackers.

(As of October 24, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)