Bullish, Equiniti, Alpaca and Apex form coalition to back issuer-sponsored tokenized stocks

Five firms launch Issuer Sponsored Token Coalition

Bullish, Equiniti, Alpaca, Apex Fintech Solutions and DriveWealth have formed an industry group that will push for tokenized stocks to stay directly linked to the companies that issue them.

The group is called the Issuer Sponsored Token Coalition and was unveiled on Thursday. It was convened by Bullish, the parent company of CoinDesk, and Equiniti, a shareholder-services and market-infrastructure firm that Bullish is acquiring.

Tokenized stocks are shares represented as digital tokens on a blockchain, a shared digital record that tracks transactions. The coalition wants those tokens tied to a company's official shareholder register, the record that shows who owns what.

Standards, settlement and custody on the work list

• The group plans to work on technical standards for issuer-sponsored tokenized securities.
• It will look at settlement, the process that finalizes a trade and moves ownership.
• It will also cover custody, meaning the safekeeping of assets.
• Another goal is finding ways to move securities between traditional market infrastructure and blockchain networks.

Why linking tokens to official records matters

The coalition's main focus is issuer-sponsored tokenization, in which a tokenized share is linked to the issuer's official shareholder register. The group says that structure is designed to keep rights such as voting, dividends and participation in corporate actions with the token holder.

The difference between that model and products that only track a stock's price has drawn attention. A recent dispute between AMC Entertainment CEO Adam Aron and Robinhood centered on whether synthetic or tokenized products may leave investors with economic exposure to a stock but without the same legal rights as registered shareholders. Issuer-sponsored models aim to close that gap by tying the token directly to the issuer's records.

What the companies said

Tom Farley, CEO of Bullish, said the group is meant to set the groundwork now. "The architecture we establish now matters and that is why we are bringing together this group of leading firms to chart the course," he said.

Alpaca said it plans to contribute to interoperability between traditional securities and onchain markets through its Instant Tokenization Network. Arush Sehgal, head of digital assets at Alpaca, said tokenization can connect issuers and investors in ways traditional market infrastructure could not, adding that "getting it right means preserving shareholder rights and ensuring onchain markets remain connected to the markets they're built on."

Apex Fintech Solutions, which provides infrastructure for broker-dealers and other financial firms, said the group could help establish standards that let tokenized markets connect with existing systems.

What the announcement confirms

The group has been formed, its name and members have been announced, and it was unveiled on Thursday. Bullish and Equiniti convened it, and Equiniti is being acquired by Bullish.

The coalition has stated its focus areas: technical standards, settlement, custody and links between traditional market systems and blockchains. It says its work follows last week's U.S. Securities and Exchange Commission exemption that allows limited onchain trading of U.S.-listed equities under certain conditions.

What is still unclear

The source material does not give a timeline for publishing standards or launching products. It also does not spell out the specific conditions attached to the SEC exemption, or say whether regulators will support the coalition's approach.

It is not known from the supplied material which firms beyond the founding members might adopt the group's standards, or how the group will be governed.

Why this matters for tokenized stockholders

The debate matters because the two models can give investors different legal positions. A holder of an issuer-sponsored token would be linked to the company's official records, while a buyer of a product that only mirrors a stock's price may not hold the same rights as a registered shareholder.

The coalition's effort also lands just after the SEC opened the door to limited onchain trading of U.S.-listed equities, a step that shapes how tokenized stock products can develop in the market the group is targeting.

Sources

• CoinDesk