Tokenised equities place a claim on a listed security in an on-chain environment that trades around the clock and is tied to the underlying by a redeemable custodial claim.
Using a daily panel of 61 tokeunderlying pairs over the tokenised equity xStock’s first 11 months of trading, we find that the no-arbitrage condition holds at the daily frequency.
Token and equity prices are cointegrated for about 80 percent of pairs, with a long-run relationship almost exactly one-for-one. The pricing tether is anchored in the traditional exchange market. The token does most of the adjustment to disequilibrium, and permanent–transitory and information-share decompositions attribute the majority of price discovery to the underlying equity.
Overall, under the current market condition and at the daily horizon, tokenised equities function as a distribution channel for prices formed in the regulated market.