Public equity tokenization is the process of converting shares of publicly traded companies into digital tokens on a blockchain. This allows for fractional ownership, 24/7 trading, and potentially faster settlement times compared to conventional stock markets. These tokens represent underlying shares held by a custodian, or directly represent equity if the company’s cap table is on-chain. It aims to enhance accessibility and efficiency in equity markets.
Context
Public equity tokenization is a topic of increasing interest in financial news, particularly as traditional exchanges explore digital asset strategies. Discussions often involve regulatory hurdles, the infrastructure required for tokenized trading venues, and the integration with existing market participants. Future trends suggest pilot programs and gradual adoption, driven by the potential for reduced costs and improved market liquidity, contingent on clear legal and regulatory frameworks.
Tokenizing public equity enhances capital formation efficiency by enabling compliant, programmatic shareholder management and expanding access to digital liquidity pools.
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