Tokenized Stocks Coalition Aims to Standardize Issuer-Backed Securities

A new coalition is being formed by Bullish and Equiniti to develop standards for tokenized public securities. The goal of this Issuer Sponsored Token Coalition is to establish a model where issuers participate directly in how their securities are tokenized, preserving the fundamental relationship between an issuer and its shareholders.

Tokenized stocks have been expanding quickly across crypto exchanges and blockchain networks, but this growth has also created fragmentation. Different providers use different custody structures, shareholder-record systems, settlement models, and restrictions, making it difficult for investors to understand their rights.

The coalition aims to establish a working group around the infrastructure and operating standards needed for tokenized securities to coexist with conventional capital markets. This may sound less exciting than another exchange listing, but it is arguably more important. If tokenized equities are going to move beyond offshore crypto products and become part of mainstream securities markets, issuers, brokers, transfer agents, and exchanges will eventually need to agree on what a tokenized share actually represents.

Early participants in the coalition include Alpaca, Apex Fintech Solutions, and DriveWealth. The group's formation is an attempt to start defining the answer to this question before the market grows around incompatible versions of it.