Blockchain Stocks: A New Era for Digital Securities

Tokenized stocks are digital representations of traditional securities recorded on a blockchain. They can be direct shares, claims on shares held by an intermediary, or synthetic exposure to a share price.

The US Securities and Exchange Commission separates issuer-sponsored tokens from third-party tokenizations. Issuer-sponsored arrangements involve the company whose securities are involved participating in issuing the tokenized security.

Third-party tokenization involves another entity creating the tokenized product around an existing security or price reference. This can produce a similar-looking asset but assign different obligations to the company, token issuer, custodian, and holder.