Nine companies have objected to plans to represent their shares on a tokenized trading platform, according to reports. The pushback raises open questions about shareholder protections and the regulation of blockchain-based securities.
Some of the companies whose shares would be represented are resisting the push to bring Wall Street equities onto blockchains. Reports on proposed tokenized-stock trading arrangements involving OKX and Intercontinental Exchange describe objections from listed businesses including Broadcom and other large issuers.
Why issuers are pushing back
Tokenized stocks aim to give investors exposure to traditional shares through blockchain-linked instruments. Supporters argue the technology can help with settlement and potentially extend access outside conventional exchange hours.
But investors still need clarity about what they own. A token might track the value of a share without carrying every right of owning the underlying security directly.
Companies also care about market integrity, disclosure obligations and how trading in unofficial or unfamiliar instruments could affect ordinary shareholders.
A test beyond technology
The objections are not a blanket prohibition on tokenization. Different platforms and jurisdictions may operate under different regulatory arrangements.
Still, conventional securities carry legal rights, duties and reporting requirements, so moving them onto blockchains takes more than a working smart contract. Regulatory permission and investor demand may still leave a third hurdle: persuading the issuers that tokenization serves their shareholders.
Source: Bitcoinist.com
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