An IPO takes the company to a regulated market with its entire admission apparatus and ongoing obligations. An STO issues tokenized securities that are registered in an ERIR and placed without the need to list. Both raise capital, but they differ in cost, duration of obligations and investor profile.
You want to raise financing. You are looking for fresh money to grow, buy a machine, or open your capital to new partners. As soon as you tell people, someone asks you the question: are you doing an IPO or an STO? They sound similar. They are not. One takes you public with all the apparatus of a regulated market. The other issues tokenized securities and registers them without entering that market. They take different paths, require different efforts, and target different companies. Here you separate the two to know which fits what you need.
Before we start, two mental shortcuts. An IPO (initial public offering) is the classic stock market listing: you issue or sell shares and admit them to trading on a regulated market, with the prospectus approved by the CNMV (your securities market regulator). An STO (tokenized securities offering) issues those same securities as tokens on a blockchain network, under Ley 6/2023, and registers them in its own registry without admission to listing. Same raw material, transferable securities. Different vehicle and different destination.
The fundamental difference: the IPO takes you to a regulated market; the STO issues tokenized securities and registers them outside that market
The IPO ends with your shares trading on a regulated market, continuously supervised. The STO ends with your tokenized securities recorded in a distributed ledger technology (DLT) registry, without admission to trading on a stock exchange (art. 8 Ley 6/2023). Both issue real securities. Both can require a prospectus. The line that separates them is market admission: the IPO seeks it, the STO does not need it.
What it means for you: if your goal is to list and provide daily liquidity to thousands of investors, you look to an IPO. If you want to raise capital from a more limited group, with less apparatus and registering the issuance on chain, you look to an STO.
What an IPO is and what it requires of you
An IPO is a public offering of shares with admission to trading on a regulated market. To get there you meet admission requirements: size, free float, audited financial history, and governance. You prepare a prospectus, which the CNMV approves before the listing (Regulation (EU) 2017/1129). You hire intermediaries: investment banking that places the deal, legal advisors, auditors. And once inside, you are not done: you take on ongoing supervision and continuous disclosure obligations, including the market abuse regime (Regulation (EU) 596/2014, MAR).
You know the outcome. Your shares trade. Anyone can buy and sell them on the market. You gain liquidity, visibility, and access to a broad universe of investors. In exchange, the process is long and expensive, and the size bar is high. IPOs play at large magnitudes; they rarely fit a mid-sized issuance.
What it means for you: the IPO gives maximum liquidity and prestige, but it demands size, time, budget, and willingness to live under permanent public scrutiny.
What an STO is and what it requires of you
An STO issues transferable securities as tokens on a blockchain network, under Ley 6/2023 and the MiFID II financial instruments framework (Directive 2014/65/EU). They are real securities: shares, bonds, debt participations. The difference is in how they are represented and recorded. Instead of a traditional registry, they live on a distributed ledger infrastructure, and their ownership is registered through an ERIR (entity responsible for registration and recording), which acts as the system's digital notary (art. 8 Ley 6/2023; Real Decreto 814/2023). As of 2026, the first ERIR authorized in Spain is Ursus-3 Capital.
Your counterpart remains the CNMV. Depending on the size and type of offering, you publish a prospectus or rely on an exemption (Regulation (EU) 2017/1129). Your issuance falls outside MiCA, the European crypto-asset regulation, because tokenized securities are not crypto-assets for its purposes (art. 2.4 Regulation (EU) 2023/1114). You are not seeking admission to a regulated market. You register the issuance on chain and direct it to your investor base.
What it means for you: the STO gives you a regulated path to issue securities without the full apparatus of a stock market listing, with on-chain registration via ERIR and, depending on the case, with a prospectus or exemption.
Comparison by dimensions
Compare the two routes by what really determines your transaction. We are not talking about exact figures, but about relative magnitudes: the order of each thing compared with the other.
Cost and time. The IPO accumulates intermediaries, audits and a long admission process; cost and timeline are high. The STO cuts part of that apparatus: fewer market intermediaries, on-chain registration, and relatively lower cost and time.
Typical size. The IPO fits large issuances, which justify the effort. The STO operates in the medium range, where a stock market listing does not pay off but you want a regulated framework.
Liquidity. The IPO offers daily liquidity in a deep market. The STO offers more limited liquidity, tied to the trading platforms that admit those tokens, not to a regulated market.
Who you target. The IPO opens your capital to the general public in an open market. The STO targets a narrower base, often professional or qualified, depending on how you structure the offering.
Control and supervision. The IPO subjects you to continuous supervision and ongoing disclosure obligations. The STO maintains securities regulation, but without the full regime of a listed issuer.
What it means for you: the choice is not «modern versus old». It is what size you issue, how much liquidity you need and how much apparatus you are willing to sustain.
Comparison table
| Dimension | IPO | STO |
|---|---|---|
| What you issue | Shares admitted to trading | Tokenized securities (shares, bonds) |
| Framework | Regulated market, CNMV prospectus, MiFID II, MAR | Ley 6/2023, MiFID II, outside MiCA |
| Registry | Traditional clearing and registry systems | On-chain registry (TRD) via ERIR |
| Prospectus | Mandatory, approved by the CNMV | Prospectus or exemption, depending on the offering |
| Admission to listing | Yes, that is the goal | No |
| Cost and time | High | Lower in relative terms |
| Typical size | Large | Medium |
| Liquidity | Daily, deep market | Limited, tied to TRD platforms |
| Target investor | General public | Narrow base, often professional |
| Continuous supervision | Complete (listed issuer) | Securities regime, without a listed issuer |
When each route makes sense
An IPO suits you when your issuance is large, you want daily liquidity for a broad investor base and you accept the cost, the timeline and the life under continuous supervision that this implies. It is the tool for companies that make the leap to listing.
An STO suits you when you issue a medium amount, you don't need admission to a regulated market and you want a more agile route, with on-chain registration and a securities framework that remains regulated. It fits when you open your capital or issue debt to a narrower group without setting up all the machinery of an IPO.
An STO does not replace the IPO. It solves a different segment. Where an IPO does not pay off because of size or burden, an STO opens a regulated door. If you want to see how this applies to specific shares, review the tokenization of shares in Spain.
What it means for you: you do not choose the most sophisticated one. You choose the one that matches your size, your target liquidity and the setup you can sustain.
What to do now
Start by situating your case. If you are unsure whether to tokenize shares or go public, read the guide on tokenization of shares in Spain to see what the token solves for you in your cap table. If an STO fits you, follow the step-by-step guide to how to issue a security token in Spain with ERIR, Ley 6/2023 and the CNMV. For the broader context, review what asset tokenization is. And if you stumble on a term, the glossary clears it up for you.
Frequently asked questions
Is an STO an IPO on blockchain?
No. An IPO admits your shares to trading on a regulated market. An STO issues tokenized securities and registers them on-chain without that admission (art. 8 Ley 6/2023). They share that both issue real securities, but the destination is different.
Does an STO need a prospectus like an IPO?
It depends on the offering. An IPO always requires a prospectus approved by the CNMV. An STO publishes a prospectus or relies on an exemption depending on the size and the type of investor (Regulation (EU) 2017/1129).
Is an STO within MiCA?
No. Tokenized securities fall outside MiCA, the European crypto-asset regulation (art. 2.4 Regulation (EU) 2023/1114). Your issuance is governed by Ley 6/2023 and MiFID II, with the CNMV as supervisor.
Does an STO provide the same liquidity as listing on a stock exchange?
No. An IPO provides daily liquidity in a deep market. An STO provides more limited liquidity, tied to the platforms that admit those tokens, not to a regulated market.
Who registers the securities in an STO?
An ERIR, the entity responsible for registration and recording, acting as the digital notary of the system (art. 8 Ley 6/2023; Real Decreto 814/2023). As of 2026, the first authorized entity in Spain is Ursus-3 Capital.
Does an STO replace the IPO?
No. It solves a different segment: medium-sized issuances, without admission to a regulated market and with registration in an ERIR. Where an IPO does not pay off because of size or burden, an STO opens an alternative regulated route.
Notice
Informational content. It does not constitute legal, tax or investment advice. HokenFi is a software and infrastructure provider; it does not provide regulated services. Check the current version of the rules cited in the BOE and EUR-Lex.
Cited regulations
- Ley 6/2023, de 17 de marzo, de los Mercados de Valores y de los Servicios de Inversión (LMVSI)
- Real Decreto 814/2023 and Real Decreto 815/2023, implementing Ley 6/2023
- Directive 2014/65/EU (MiFID II)
- Regulation (EU) 2017/1129 (Prospectuses)
- Regulation (EU) 2023/1114 (MiCA)
- Regulation (EU) 596/2014 (MAR, market abuse)
