Tokenized Stocks Risk Digital Paper Crisis, Warns Fairmint CEO

Crypto's tokenized-stock boom is at risk of creating a digital version of the 'paper crisis' that hit Wall Street in the late 1960s, according to Joris Delanoue, CEO of onchain securities infrastructure provider Fairmint. The crisis was caused by booming U.S. stock trading overwhelming a market reliant on clerks processing paper share certificates.

The resulting chaos led to back offices falling behind, securities going missing, and settlement failures piling up. In 1968, the New York Stock Exchange even closed on Wednesdays for part of the year to let firms catch up.

Delanoue warns that tokenized stocks may be recreating this crisis in a digital format. He says exchanges, special-purpose vehicles (SPVs), token wrappers, and proprietary ledgers could fragment ownership records as tokenized stocks grow.