How Dividends and Corporate Actions Work in Tokenized Stocks

Article Summary

• 🔗 Tokenized stocks are backed 1:1 by real shares and can be traded globally 24 hours a day.
• 💰 Dividends are not paid out in cash; instead, they are distributed by adding tokens (e.g., a $10 dividend on a $100 token automatically increases the balance from 1.00 to 1.10 tokens).
• 📊 Corporate actions are automatically adjusted on-chain; for instance, a 1:4 stock split immediately converts 1 token into 4 tokens of equivalent value.
• ⚖️ Value Added Tax (VAT) on crypto assets in Indonesia was officially abolished as of August 1, 2025, in accordance with PMK Number 50 of 2025.
• 🏛️ Crypto transactions are now only subject to an Income Tax (PPh) of 0.21%, with industry oversight fully transferred to the OJK since January 10, 2025.

Understanding Dividends

A dividend is a percentage of a company’s profit paid to shareholders as their share of the earnings. Dividends are generally paid quarterly, with the amount determined by the board of directors based on the company’s recent earnings.

Furthermore, dividends can be paid in the form of cash or additional shares. When a company announces a dividend, it also declares a payment date, which is the time when the dividend will be deposited into the shareholder’s account.

Understanding Tokenized Stocks

Tokenized stocks are digital representations of traditional company shares minted using blockchain technology. Each token is designed to mirror the price of its underlying stock and is fully backed on a 1:1 ratio by the actual shares held in a regulated custodian institution.

Because they operate on a blockchain network, these instruments offer several advantages, such as 24-hour trading, the flexibility to purchase fractional shares, and ease of global access. However, these digital shares typically have lower liquidity compared to their traditional counterparts and do not grant voting rights to token holders. Additionally, regulatory policies vary significantly across jurisdictions.

Generally, tokenized stocks provide on-chain price exposure to publicly traded U.S. equities and ETFs, such as Nvidia, Apple, or the S&P 500. The naming convention and structure of the tokens can differ depending on the issuer:

a. xStocks

• Technical Definition: xStocks are tokenized representations of specific U.S. equities and ETFs that are fully collateralized 1:1 by the underlying asset. These tokens are asset-backed instruments, not synthetic ones.
• Symbol Format: Token symbols end with the letter “X” (e.g., TSLAX for “Tesla xStocks”).
• Network Availability: xStocks tokens are issued and accessible across various blockchain networks, including Solana, Ethereum, Mantle, TON, and Ink, with more integrations currently under development.
• Dividends & Corporate Actions Mechanism: Corporate actions such as dividends and stock splits are processed through a token rebasing mechanism.
  • Dividends: Earnings are not distributed in cash; instead, the token balance of holders is automatically increased.
  • Stock Splits & Others: Changes are automatically reflected on-chain, requiring no manual action from the investor.

b. Ondo (Ondo Global Markets)

• Technical Definition: If tokenized stocks are issued by the Ondo Global Markets (OGM) platform, they are specifically designed as total-return trackers. This means the token tracks the total return of the underlying asset (price plus dividends) and is fully backed 1:1 by the original security.
• Symbol Format: Token symbols usually end with “on” or “ON” (e.g., MAon for Mastercard, TSLAon for Tesla, or SPYon for the S&P 500 ETF).
• Network Availability: Ondo stock tokens primarily operate on the Ethereum and BNB Chain networks. However, through recent developments, these tokens can also be bridged to advanced ecosystems like HyperEVM (Hyperliquid) to facilitate more complex smart contract-based trading strategies.
• Dividends & Corporate Actions Mechanism:
  • Dividends: Not distributed in cash; instead, they are automatically reinvested to increase the value of the token itself (after withholding tax).
  • Stock Splits & Mergers: Value-to-token ratio adjustments are executed automatically by smart contracts. Investors do not need to take any action.
  • Voting Rights: Investors do not hold direct voting rights. Users can submit their voting preferences, but the final decision rests entirely with Ondo as the legal custodian.

How Dividends Work in Tokenized Stocks

The question of whether tokenized stocks pay dividends comes up frequently. In short: it highly depends on the platform’s policy, the issuer, and the product structure.

While many tokenized stocks reflect dividend distributions, payments are generally not made in conventional cash. According to Phantom, here are several common dividend handling mechanisms implemented by different service providers:

• a. Increase in Token Quantity: Dividends are distributed by adding more tokens to the investor’s balance. For example, if the price of one ACMEX token is $100 and there is a $10 dividend payout, the investor’s balance will increase from 1.00 to 1.10 tokens. Meanwhile, the price per token remains around $100.
• b. Increase in Token Value: Dividends do not increase the number of tokens; instead, they are automatically reinvested to increase the value of the token itself over time. For example, if a token is priced at $100 with a $10 dividend, the investor’s token balance remains 1.00. However, the token now appreciates in value because it represents a larger share portion (equivalent to 1.10 shares), bringing the total valuation to around $110.
• c. Direct Distribution: Some providers offer products that route dividends directly to holders. These payments are typically made via stablecoin transfers or other crypto assets sent directly to the investor’s digital wallet.
• d. Price Exposure Only (No Dividends): There are also service providers that purely offer exposure to the stock’s price movements without granting any rights to dividend distributions.

Given that approaches and mechanisms for handling dividends on stock-backed crypto assets vary greatly, the specific terms and official documentation of the issuer remain the primary point of reference for the exact procedure of each product.

Corporate Actions in Tokenized Stocks

It is important to understand that when investing in tokenized stocks, there is no direct interaction with the company issuing the underlying shares. Instead, interactions occur with the platform or the token issuer/custodian that holds the underlying shares as backing.

Investor Rights During Corporate Actions

The rights of a token holder depend heavily on the platform’s Terms & Conditions (T&C) rather than traditional capital market laws. Generally, investor rights are divided into two main categories:

• Economic Rights (Fulfilled): Token holders are entitled to the economic value of the corporate action. If the underlying company distributes financial gains or increases the number of shares, token holders will receive an equivalent value adjustment in their crypto portfolio.
• Voting Rights (Generally Non-Existent): In corporate actions that require shareholder approval (such as a General Meeting of Shareholders), tokenized stock holders do not have voting rights. Voting rights remain with the custodian holding the actual shares, and they usually choose to abstain or vote at their own discretion.
• Right to Information: Investors have the right to receive announcements from the crypto exchange platform regarding the execution schedule (such as the ex-date and record date) and how the platform will process the corporate action on the users’ token balances.

Types of Corporate Actions and Their Mechanisms

Corporate action settlements on tokenized stocks are executed automatically by the platform using smart contracts or internal exchange system adjustments. The common types include:

• Cash Dividends: When the underlying stock distributes cash dividends, the custodian receives the fiat funds. The platform then converts these funds and distributes them to the token holders’ digital wallets. Investors usually receive dividends in the form of Stablecoins (such as USDC, USDT, or BUSD) or the platform’s native cryptocurrency, with the applicable withholding tax from the stock’s country of origin already deducted.
• Stock Splits & Reverse Splits: The ratio of tokens held by the investor is adjusted automatically to mirror the underlying stock without altering the total investment value. For example, if a 1:4 stock split occurs on Apple (AAPL) shares and an investor holds 1 AAPL token, their balance will automatically change to 4 AAPL tokens, with the price per token adjusted to one-quarter of its previous price.
• Spin-offs: When a company spins off a subsidiary into a new public company, traditional shareholders receive new shares. For tokenized stocks, platforms generally have two options: either issuing a new token representing the spun-off company’s shares and distributing it to token holders, or (more commonly) liquidating the spin-off shares into cash and distributing the value to token holders in the form of stablecoins.
• Mergers, Acquisitions, or Delistings: If a company is acquired for cash or delisted from the exchange, the underlying shares are liquidated. The platform will delist the token, sell the underlying shares in the traditional market, and distribute the proceeds (in stablecoins) proportionally to token holders.
• Rights Issues: This is the most complex corporate action to implement in a crypto ecosystem. Because exercising rights requires a manual process and additional funds, most crypto platforms do not support active participation in Rights Issues. Instead, the custodian typically sells the rights on the open market and distributes the cash proceeds (stablecoins) to token holders.

Differences: Tokenized Stocks vs. Traditional Stocks

Tokenized Stocks Regulation in Indonesia

Tokenizing shares in Indonesia is currently legal but limited under the strict supervision of the OJK in accordance with Law Number 4 of 2023 (UU P2SK). This regulation categorizes digital assets that resemble securities as Financial Sector Technology Innovations (ITSK), the oversight of which has been transferred from Bappebti to the OJK. Trading for retail public is only permitted for platforms that have entered the Regulatory Sandbox or hold special licenses from the relevant authorities.

Operationally, POJK Number 3 of 2024 mandates that every financial asset tokenization organizer undergo strict testing to guarantee consumer protection. Offering stock tokens without an official license is considered illegal, as they must comply with the transparency and ownership standards stipulated in Law Number 8 of 1995 concerning Capital Markets. Without compliance with these rules, the instrument lacks valid operational legality in Indonesian jurisdiction.

From a tax perspective in 2026, crypto asset investments in Indonesia refer to PMK Number 50 of 2025, which officially took effect on August 1, 2025. Through this regulation, VAT on the delivery of crypto assets was officially abolished, as crypto assets are now categorized as digital financial assets equated with securities, following the mandate of Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (UU P2SK). Instead, every crypto asset investment is subject to an Income Tax (PPh) of 0.21%, which is collected through the trade organizers. Meanwhile, the industrial oversight of crypto assets has been under the Financial Services Authority (OJK), replacing Bappebti since January 10, 2025.

Conclusion

The innovation of tokenized stocks offers a revolutionary breakthrough in accessibility, allowing market participants to reach global equities 24/7 without geographic barriers. Although retail investors generally do not hold direct voting rights and dividend payments are realized through automatic value or token quantity adjustments via smart contracts, the economic rights of token holders remain protected thanks to the 1:1 backing with the original securities. In Indonesia, this instrument is gaining further legitimacy along with the transition of centralized oversight to the OJK and the tax regulation updates in 2025 that abolished VAT and established a flat 0.21% PPh, creating a digital investment ecosystem that is more efficient, structured, and legally certain.

How to Buy Tokenized Stocks on Pintu

On Pintu, purchasing Tokenized Stocks can start with a very affordable nominal amount, starting from just Rp11,000, allowing users to gain exposure to stock valuations without requiring large capital.

Through the Tokenized Stocks Market page, Pintu provides various options for tokenized stocks such as SBUX, TLTon, and MAon. This market makes it easy for users to access and trade a variety of global stocks on-chain.

Here is how easily you can buy Tokenized Stocks on Pintu:

1. Log into the Pintu homepage.
2. Go to the Tokenized Stocks Market page.
3. Search for and select the crypto asset you want to invest in.
4. Enter the nominal amount you wish to purchase, and follow the subsequent steps.

FAQ

Do Tokenized Stock holders have the same rights as traditional shareholders?

Not entirely. Tokenized stock holders generally only receive economic rights (such as price movement exposure and dividend distributions), but they do not hold voting rights or direct ownership status legally recorded with the underlying company.

Are all changes in the underlying stock automatically reflected in Tokenized Stocks?

Generally, yes. Basic corporate actions like stock splits or dividend distributions are usually adjusted automatically in the token portfolio. However, the mechanism and execution timing still depend on the infrastructure (smart contracts) and policies of the token-issuing entity.

Is it possible for the value of a Tokenized Stock to differ from its underlying stock’s movement?

Yes, price discrepancies (spreads) can occur. This difference is generally triggered by liquidity levels on the crypto exchange, trading activity outside traditional market hours (since crypto operates 24/7), and latency in data retrieval technology (oracles).

Does every platform share the same adjustment policies for Tokenized Stocks?

No. Every platform or issuer has different Terms & Conditions (T&C) and product structures. The handling of corporate actions, forms of dividend distribution, and asset settlement mechanisms vary greatly among service providers.