Tokenized Securities’ Fate Depends on Investors, Not Regulators
Intercontinental Exchange and Nasdaq are developing platforms for trading tokenized securities, with success dependent on delivering value to investors beyond existing markets. Tokenized securities offer benefits like fractional ownership and faster settlement, but investors must consider returns, fees, and risks.
Intercontinental Exchange, parent of the New York Stock Exchange, is developing a platform for trading and on-chain settlement of tokenized securities. Nasdaq also unveiled plans to integrate tokenized shares into existing market infrastructure while preserving shareholder rights. The Securities and Exchange Commission provides a framework for understanding tokenized securities, defining them as securities represented by crypto assets with ownership recorded on blockchains. Tokenized securities offer benefits like fractional ownership, longer trading hours, and faster settlement. Investors must consider whether tokenized securities offer meaningful returns and whether they confer voting rights, dividends, and other distribution rights. Sponsors may charge issuance or platform fees, and thin trading can lead to wide bid-ask spreads and poor execution.
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