In a significant move, Securitize, backed by BlackRock, and Computershare are set to bring a substantial portion of the $70 trillion US stock market onto the blockchain through tokenized equities, effectively bridging traditional Wall Street infrastructure with blockchain technology. The agreement enables publicly traded companies to introduce tokenized equity, known as Issuer-Sponsored Tokens (ISTs), in addition to their existing shares. This gives investors the flexibility to hold stocks either through traditional systems or digitally, using a wallet.
This endeavor is part of a broader initiative to integrate tokenized shares into the current market regulations while offering novel methods for holding and transferring assets. This includes wallet-based ownership and expedited settlement processes.
Transfer agents, such as Computershare, play a pivotal role in this system by maintaining shareholder records and handling corporate actions. By integrating at this level, the companies aim to circumvent a common workaround in the crypto space, where tokens often represent claims on shares rather than the shares themselves.
Securitize is a blockchain-based firm that specializes in issuing, trading, and managing real-world assets, such as equities and funds, in tokenized form on blockchain networks. The firm is renowned for issuing a $2.5 billion tokenized money market fund for BlackRock and for collaborating with the New York Stock Exchange on its tokenized equity platform.
Securitize also plans to go public later this year through a SPAC deal with Cantor Equity Partners II (CEPT). The Convergence of Blockchain and Transfer Agents Under this setup, Computershare will serve as the transfer agent for tokenized shares, mirroring its role for traditional shares.
This includes managing records and processing events like dividends or stock splits across both formats. Securitize provides the underlying technology, with the blockchain component operating primarily in the background.
The tokens are designed to represent direct ownership, rather than derivatives layered on top of existing stocks. "ISTs do not rely on derivative tokens that sit on top of underlying shares," stated Securitize CEO Carlos Domingo.
"They provide US issuers with the ability to create direct equity ownership in token form." Computershare's extensive reach could lend scale to this effort, as the firm serves over 25,000 companies and acts as a transfer agent for approximately 58% of the S&P 500. This structure also allows issuers to maintain control over their shareholder base, a critical requirement for public companies. "Our focus has been to empower US-listed companies to issue tokenized equity while retaining control," said Ann Bowering, CEO of issuer services at Computershare North America.