Tokenized Stocks Expose a Major Tax Reporting Gap in Crypto—Robin Singh

The global cryptocurrency landscape is facing a reckoning regarding tax reporting, and tokenized stocks are emerging as a potential catalyst for change. Platforms like Robinhood and Gemini are introducing tokenized stocks—blockchain-based derivatives mirroring real equities—in the EU, enabling 24/7 trading. This increased accessibility and innovation, however, highlights a significant disparity in tax reporting between crypto and traditional markets.

Currently, many jurisdictions lag in crypto tax reporting compared to traditional asset exchanges. Australia serves as a prime example. The Australian Stock Exchange (ASX) provides the tax office with detailed transaction data, automatically pre-filling tax returns. Conversely, the Australian Taxation Office (ATO) adopts a less comprehensive approach for crypto, relying on notifications rather than pre-filled reports. While the ATO is aware of crypto account activity, its oversight lacks the depth of its stock market monitoring.

This disparity was perhaps justifiable in crypto’s early stages, dominated by speculative assets. However, the expansion of tokenized stocks globally necessitates a change. Governments cannot afford to overlook potential tax revenue generated from on-chain transactions. The rising popularity of tokenized stocks will inevitably pressure regulators to act.

The United States is already taking steps to address this issue. The IRS’s new crypto reporting rules, including Form 1099-DA, scheduled for 2026, will require crypto brokers to report transactions similarly to traditional institutions. Robinhood’s planned U.S. launch of tokenized stocks raises questions about the timing of this rollout in relation to the new IRS requirements.

Globally, the OECD’s Crypto-Asset Reporting Framework (CARF), also slated for 2026, will mandate cross-jurisdictional data sharing, mirroring the Common Reporting Standard for banks. The inherent similarity between tokenized stocks and traditional equities demands equivalent tax reporting. The era of regulatory ambiguity for crypto is ending. Within the next five years, full tax transparency will likely become the norm, driven largely by the growing prominence of tokenized stocks.