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, thereby bridging the gap between traditional Wall Street infrastructure and blockchain technology. This development allows listed companies to introduce tokenized equity, known as Issuer-Sponsored Tokens (ISTs), in addition to their existing shares, providing investors with the flexibility to hold stocks through traditional systems or digitally.
The agreement is part of a broader initiative to integrate tokenized shares into current market regulations while introducing novel methods for holding and transferring assets, including wallet-based ownership and expedited settlement. 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 represent claims on shares rather than the shares themselves. As a blockchain-based firm, Securitize facilitates the issuance, trading, and management of real-world assets, including equities and funds, in tokenized form on blockchain networks.
The company has gained recognition for issuing a $2.5 billion tokenized money market fund for BlackRock and assisting the New York Stock Exchange in developing its tokenized equity platform. Furthermore, Securitize plans to go public later this year through a SPAC deal with Cantor Equity Partners II (CEPT). Under this setup, Computershare will assume the role of transfer agent for tokenized shares, akin to its role for traditional shares, encompassing record management and event processing, such as 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, bypassing derivatives layered on top of existing stock.
According to Securitize CEO Carlos Domingo, 'ISTs do not rely on derivative tokens that sit on top of underlying shares. They provide US issuers with the ability to create direct equity ownership in token form.' The reach of Computershare, which serves over 25,000 companies and acts as a transfer agent for approximately 58% of the S&P 500, could impart scale to this effort.
This structure also enables issuers to maintain control over their shareholder base, a crucial requirement for public companies. As Ann Bowering, CEO of issuer services at Computershare North America, emphasized, 'Our focus has been to empower US-listed companies to issue tokenized equity while retaining control.'