The coalition aims to connect on-chain shares with official shareholder records in light of the U.S. SEC's innovation exemption for tokenized stock trading.
By Krisztian Sandor, AI Boost|Edited by Aoyon Ashraf1 hour ago2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Bullish logo on the New York Stock Exchange (CoinDesk/Nik De)SummaryShow- Bullish, Equiniti, Alpaca, Apex Fintech Solutions, and DriveWealth have formed a new coalition aimed at developing issuer-backed tokenized securities.
- The coalition seeks to ensure tokenized shares are connected to official shareholder records, thereby maintaining rights related to voting, dividends, and other ownership privileges.
- This initiative arises amidst ongoing discussions among brokers, issuers, and regulators regarding the differences between tokenized shares and synthetic products that merely track prices.
A new coalition has emerged, consisting of Bullish (BLSH), Equiniti, Alpaca, Apex Fintech Solutions, and DriveWealth, with a focus on establishing standards for tokenized securities that remain directly associated with the issuing companies.
Dubbed the Issuer Sponsored Token Coalition, this group was formed by Bullish, the parent company of CoinDesk, alongside Equiniti, a firm specializing in shareholder services and market infrastructure that is currently being acquired by the cryptocurrency platform.
The coalition plans to tackle technical standards, settlement processes, custody issues, and methods for transferring securities between traditional market systems and blockchain networks.
Central to its mission is the concept of issuer-sponsored tokenization, which links tokenized shares to a company’s official shareholder register. This framework is intended to safeguard rights such as voting, dividends, and involvement in corporate activities.
This distinction has gained prominence as companies introduce products that provide stock exposure without necessarily granting holders direct ownership of the underlying shares.
A recent conflict between AMC Entertainment's CEO Adam Aron and Robinhood has spotlighted this concern, raising questions about whether synthetic or tokenized products could offer investors economic exposure to stocks without the same legal rights as registered shareholders. The issuer-sponsored approach aims to bridge this gap by directly linking tokens to the issuer’s records.
“The architecture we establish now matters, and that is why we are bringing together this group of leading firms to chart the course,” stated Tom Farley, CEO of Bullish.
Alpaca plans to enhance interoperability between traditional securities and on-chain markets via its Instant Tokenization Network.
"Tokenization provides a chance to connect issuers and investors in ways that traditional market infrastructure could not," remarked Arush Sehgal, head of digital assets at Alpaca. "Getting it right means safeguarding shareholder rights and ensuring that on-chain markets remain linked to their foundational markets.
According to Apex Fintech Solutions, which supplies infrastructure for broker-dealers and other financial entities, the coalition could help set standards that allow tokenized markets to integrate with existing systems.
This initiative follows the recent U.S. Securities and Exchange Commission exemption that permits limited on-chain trading of U.S.-listed equities under specific conditions.
Read more: Real stocks are finally coming on blockchain. Here’s how the SEC wants it to work
TokenizationAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News- 1Someone was trying to sell Ondo Finance after founder Nathan Allman's death56 minutes ago
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