At least weekly I’m reading about a new tokenized equities offering. It’s all interesting, and there are some very serious firms entering the space. But it can be difficult to distill what actually matters. And to be clear, this isn’t a pitch; just my own nerdy thoughts and analysis. Where to start…

Most people ask about speed, fractional ownership, 24/7 trading. All important. But the question I keep coming back to is simpler and more fundamental: what does the end user actually own?

Our day job at Sharegain is securities lending – an operationally dense, structurally outdated corner of the market, which is exactly why we’re in it (as a friendly disruptor). The work mandates a very specific way of looking at ownership: who holds legal title, what rights attach to it, and what happens when ownership transfers across jurisdictions, CSDs, custodians, and broker-dealers. Our model is non-custodial; we enable lending without inserting ourselves into the custody chain – which is why the tokenization ownership question feels so familiar. The platform was designed to operate at the beneficial owner level – individual governance, preferences, and eligibility – rather than layering those capabilities onto omnibus infrastructure after the fact. It’s why the ownership question in tokenization isn’t academic for us. I’ll save the broader securities finance implications for a different piece – but the analysis that follows is the necessary foundation for it.

This is a US-focused question for now, both because the US is where the most tangible progress is being made, and because it’s the only major market where the ownership infrastructure genuinely forks into two distinct paths (which is why most of the headline-grabbing launches are US-based).

The Landscape: Two Categories, Not One

The market is splitting into two fundamentally different categories. Conflating them is an extremely common mistake in the dialog right now.

Category 1: Repackaged exposure products – CFDs and structured notes wrapped as tokens. You don’t own the underlying security; you own a contract, with varying degrees of counterparty risk depending on structure. Robinhood Europe’s Stock Token is a MiFID II derivative. Kraken xStocks are collateralized tracker certificates (structured notes). Both are live in EU retail today (not in the US). The SEC has indicated structures like these may sit within the securities-based swaps framework – accessible only to eligible contract participants without registration. These were smart products in the EU for their moment, and the firms behind them are well positioned to transition into regulated securities structures as jurisdictions allow and if they so choose.

Category 2: True tokenized securities – where the token represents genuine ownership with equivalent legal rights. This is where the real question lives. But ‘genuine ownership’ means different things depending on where in the ownership chain the token sits.

The Fork: Where Ownership Diverges

Every public US equity begins with two parties: an issuer and a transfer agent. Always. The issuer creates the security; the transfer agent is the authoritative register of who owns it – one master securityholder file, one recordkeeping agent, required by law (SEC Rule 17Ad-10). What happens at the transfer agent is where the ownership chain forks – and that fork defines everything about what a token can and cannot represent. This is governed by the Uniform Commercial Code, Article 8 (UCC 8) – the property-rights framework that defines how securities are held in the US, whether directly (in your name on the register) or indirectly (through a chain of intermediaries in ‘street name’ – meaning your broker holds the shares on your behalf). Most tokenization commentary skips this entirely – jumping straight to blockchain mechanics without addressing the property rights framework underneath. UCC 8 isn’t background reading; it’s the operating system.

Path 1: The CSD / DTC Track

On this path, the transfer agent ‘deposits’ securities into The Depository Trust & Clearing Corporation (DTCC)‘s subsidiary The Depository Trust Company (DTC), which is the national central securities depository (CSD) for the US. Cede & Co., DTC’s nominee, is registered as the legal owner on the transfer agent’s books – and from that single line item, the entire indirect holding system branches out from it. Your broker holds your beneficial interest in street name within this structure. This is the indirect holding system built into UCC Article 8 – and it underpins over $100 trillion in assets across 1.4 million securities issues today.

A token created on this track is a digital representation of a DTC participant’s security entitlement (and thus a customer’s beneficial interest through that participant). DTC’s nominee remains the registered legal owner. The intermediary chain – CSD, broker, transfer agent – is preserved. The legal protections are the same. What changes is the record-keeping format, not the ownership structure. The token holder owns a securities entitlement under UCC Article 8 – the same beneficial interest they’d hold through any broker today. If someone says a DTC-track token eliminates intermediaries – it doesn’t. It digitizes them.

When people say ‘DTC-fungible’ in this context, let’s be precise – because I think there are three distinct layers, and they’re progressively harder to achieve:

First: is the token the same security – same CUSIP, same legal rights?

Second: can you move fluidly between token form and traditional form at DTC – reasonably quick mint and burn?

Third: does the token satisfy standard DTC obligations – e.g., can it settle a trade, serve as margin, count as collateral within DTC’s infrastructure?

Right now, no single solution passes all three. Even on the DTC track, the pilot is structured so that tokens are not treated as eligible for settlement, margin, or collateral purposes during the pilot. On the Transfer Agent track, I’m doubtful the related conversations have even begun (understandably). Layer one is largely solved. Layer two is being built. Layer three is where the real value unlocks – and that’s probably years away.

This is the path the incumbents are building on. DTC received SEC no-action relief in December 2025 for its Digital Omnibus Account (technically a three-year pilot from launch) – the mechanism that allows tokens to be minted against securities held in DTC custody. Nasdaq received SEC approval this month (March 2026) for a rule change that gives participants the option to receive tokenized representations of settled trades, leveraging DTCC’s initial coverage of Russell 1000 stocks and major ETFs. NYSE is building a 24/7 alternative trading system (ATS) for tokenized securities designed to stay DTC-fungible – same CUSIP, preserving fungibility between tokenized and traditional shares. And ICE, NYSE’s parent, made a strategic investment in OKX, with a planned rollout to OKX’s 120 million users in H2 2026.

DTC members – the major broker-dealers and banks – will be able to participate through the Digital Omnibus Account infrastructure, but it’s still early – the rails are being laid; the last-mile story is still to come. The underlying infrastructure is being built by Digital Asset on the Canton Network.

Path 2: The Transfer Agent (TA) Track

On this path, the TA’s register lives on-chain – the blockchain is the authoritative record. DTC is not in the mix. This looks like a departure from the traditional plumbing – but direct registration has always existed (if you’ve ever held shares directly on a company’s register through Computershare or a similar TA, rather than through your broker, that’s direct registration). What’s new is the programmability layer on top of it. Figure, among others, is building a full-stack model along this path – where compliance logic, transfer restrictions, and distribution rules can be encoded directly into the token: enforced automatically at the point of transfer rather than reconciled after the fact. The appeal is direct holder rights (or very close to it), little to no intermediary chain, and lower cost.

For new issuances, this can be clean – the issuer appoints a TA with digital capabilities from day one, the on-chain ledger is the master securityholder file, and the token holder’s wallet is their entry on the register. For existing public equities, it’s more involved. A shareholder first has to move their shares out of their broker’s account at DTC through the direct registration system (DRS) – effectively re-registering from DTC’s nominee into the holder’s own name on the transfer agent’s books. From there, a second transfer to the delegated digital TA, and tokens are issued 1:1.

What ‘direct registration’ actually means here is more nuanced than the term implies. In the Galaxy / Superstateimplementation, intermediation hasn’t been eliminated – it’s been radically simplified. Instead of a multi-layered broker–CSD–nominee chain, ownership runs through a second regulated TA operating a real-time, on-chain sub-ledger – a delegated TA arrangement. For a fresh issuance where the digital TA is the sole recordkeeping agent, the token holder sits directly on the master securityholder file – no intermediary layer at all. In that case, the token holder is the registered owner – their name is on the issuer’s books. If someone says TA-track tokens always mean direct ownership, ask whether the holder’s name is on the master securityholder file or on a delegated sub-ledger. The answer changes what ‘direct’ actually means.

TA-track tokens may represent the same underlying security – same CUSIP, same class – but they can’t settle a DTC obligation or move fluidly back into DTC custody. You can reverse the process manually, but that’s convertibility with friction, not fungibility. And for any existing public issuer, that’s a real constraint: their liquidity, institutional shareholder base, index eligibility, and corporate action infrastructure all depend on DTC. No public issuer is going to abandon that.

Corporate actions are where the gap is most visible. For public equities, the free float is overwhelmingly held and serviced at scale through DTC and its participant broker‑dealers, with corporate actions, distributions, and voting flowing through that infrastructure for street‑name holders. On the TA track, no equivalent infrastructure exists at scale. The same is true of options and clearing: you can’t write a cleared options contract against a TA-track token today. To be fair, the DTC track isn’t there yet either – under the DTC no-action letter, tokens carry no settlement or collateral value during the pilot, and the only corporate action the tokenization infrastructure can process natively is a cash payment – anything more complex means ‘burning’ back to traditional form. But that fallback exists. On the TA track, the TA can process corporate actions for its own register – but the overwhelming majority of public equity holders sit in street name at DTC participants, and servicing them at scale requires infrastructure that reaches into that holding structure. That doesn’t exist yet.

The delegated TA model isn’t a transition state – it’s the structural reality for any issuer that wants to offer a tokenized path without losing DTC. Going fully on-chain – one TA, one digital register, no DTC – realistically requires a fresh issuance: a company that’s digital-native from day one. That said, once a traditional TA adds native on-chain capabilities (or the inverse, where a digital TA acquires a traditional TA) – maintaining both conventional and tokenized entries on a single register – the delegated arrangement becomes redundant. That’s not far off.

Watch the private-to-public pipeline. The next generation of large private companies – the ones staying private far longer – may never touch DTC before they come to market. For a company already trading secondaries on a registered ATS, issuing natively on-chain through a digital transfer agent isn’t a departure from convention; it’s arguably the path of least resistance. Take a company like SpaceX – already trading secondaries on a registered ATS. The day it goes public, the question isn’t whether it plugs into DTC (it will), but whether it also maintains a tokenized path alongside it – and if so, how much of the infrastructure is simply ready-to-go.

Multiple fintechs are building along this track, and what’s emerging is the potential for the broker-dealer, transfer agent, and ATS to consolidate under a single entity – placing issuance, trading, custody, and settlement in one stack. The operational efficiency is obvious. The concentration risk isn’t. Collapsing core market functions into a single vertically integrated stack creates a point of failure that traditional market structure was deliberately designed to avoid, and if a single-stack platform fails, there is no tested legal framework for how token holders recover. That concern is structural, not firm-specific – and it applies regardless of how well any individual company is executing.

The reality of this track today: for fresh issuances, offerings operate under private placement exemptions – Reg D, Reg S, or Reg A+. For existing public equities moved onto the TA track, the underlying security remains publicly registered – but the tokenized form is only accessible through ATS venues that aren’t open to broad retail participation. Either way, ‘tokenized public equity’ is a bit of a misnomer when the access channel is restricted – it resolves as public market infrastructure catches up, but matters until then.

The biggest names are hedging across both tracks. NYSE’s recently announced Securitize partnership puts them on the TA track, alongside their DTC-fungible ATS – perhaps positioning for a world where both paths could converge, rather than betting on just one. Nasdaq has taken a different approach – partnering with Kraken on an issuer-led framework that prioritizes corporate governance, including proxy voting and corporate action automation before launching, with a target of early 2027. The infrastructure path hasn’t been specified, but this is where I’d expect it to land. Coinbase hasn’t disclosed its licensing structure or go-to-market, but with over 100 million registered users and the balance sheet to acquire what it doesn’t build, its eventual entry could reshape how quickly this market scales.

The SEC’s Emerging Taxonomy

The regulatory picture is coming into focus.

In January 2026, SEC staff articulated a taxonomy distinguishing issuer‑sponsored tokenization from third‑party tokenization. The issuer‑led category includes models that integrate distributed ledger technology into the master securityholder file. This reflects current staff views rather than formal rulemaking, but it provides a clear signal of how regulators are framing compliant tokenized‑securities structures. This isn’t just a compliance label; it’s a business model distinction. And importantly, it cuts across both tracks: a third-party tokenizer can operate on either track, or create synthetic exposure – wrapped tokens, CFDs, structured notes – that sits outside both. The distinction matters because issuer-sponsored tokenization carries the issuer’s authorization – the legal chain is intact from creation to token. Third-party tokenization raises harder questions: who authorized it, what rights does the token actually carry, and does the issuer even know it’s happened. That’s the line between genuine tokenized ownership and something that only looks like it.

On March 12, the SEC’s Investor Advisory Committee recommended a limited innovation exemption for tokenized equity trading. Chair Atkins has publicly stated that issuers can already work with transfer agents to tokenize under existing rules, and has signaled that TA modernization rulemaking is a 2026 priority – formalizing the framework, not granting new authority.

Where The Models Overlap

Some of the most active firms in this space don’t sit neatly in one category or on one track. Ondo Finance currently offers repackaged exposure products outside the US and has filed a registration statement with the SEC for Ondo Global Markets – which, if effective, would make it the first issuer of transferable tokenized stocks subject to SEC reporting. Securitize operates as a digital transfer agent and has partnered with NYSE on its DTCC-fungible ATS – straddling both paths simultaneously. This kind of multi-model positioning could become the norm. The business logic is simple: firms are hedging uncertainty by maintaining optionality across models, and the SEC’s taxonomy gives them a framework to do so intentionally rather than accidentally. For anyone evaluating these firms – as partners, competitors, or investments – the model label matters less than the model exposure. Which structures are they operating across – and do they understand the legal and operational differences between them?

A Note For International Readers

The two-track framework described here is unique to the United States. UCC Article 8 is US law. In every other major jurisdiction – the UK, EU, Switzerland, Hong Kong, Singapore, Brazil, Canada – there is no transfer agent or registrar that can serve as an independent ownership path outside the dematerialized CSD-based systems for market-traded securities – the register either sits within the CSD infrastructure or is functionally dependent on it. The opportunity to bypass the CSD via an alternative registrar simply doesn’t exist elsewhere. Actual securities tokenization internationally means modernizing an existing CSD, licensing new ones, or building a CSD-equivalent from scratch – not bypassing it. LSEG is developing a Digital Securities Depository pending regulatory approval; others are building EU/EEA passporting through the DLT Pilot Regime. Most major jurisdictions outside the US still have significant legislative, regulatory, and market structure groundwork to lay before they can meaningfully enable tokenized securities across the full spectrum of participants. That said, many of these jurisdictions run on considerably more modern technology infrastructure than the US – so who gets there first, at scale, may not be as obvious as it looks today. And for the significant non-US investor base that already holds US securities – often through a global bank custodial network with DTC sub custody – none of this is academic. The ownership structure, custody chain, and regulatory framework are US-governed regardless of where the holder sits. Tokenization changes how those securities are recorded and transferred, and the implications flow through the entire chain.

The Strategic Question

The DTC track will scale first if they can deliver this year. The institutional shareholder base, liquidity, index eligibility, and – in theory – the corporate action infrastructure are already there. The TA track has to build every one of those from scratch. But it may not need to match DTC across the board to carve out a meaningful role – particularly for fresh issuances, private-to-public transitions, and market segments where programmability and direct holder access matter more than institutional-scale liquidity. Both digital paths will coexist alongside traditional form for the foreseeable future. No standard equity token today conveys the full rights and operational capabilities of a conventional holding – and the ones that come close aren’t yet liquid at scale. Interoperability across settlement rails is unsolved, but solvable once rights-equivalence in liquid or DTC-fungible form has been established.

The market is at an early point of meaningful change. The outcomes are far from clear, the winner is not obvious, and there is an enormous amount of noise – much of it from parties who haven’t fully reckoned with what a beneficial owner truly holds under each model.

The strategic question is pace, not destination. If you’re evaluating a tokenized equities product – as an investor, a partner, or a competitor – start with three questions: what does the token holder legally own, where does that ownership sit in the custody chain, and what happens if one layer of the stack fails. If the answer to any of those isn’t clear, keep asking – and don’t settle for a whitepaper as the answer.

Sources referenced:

  • DTCC, “Central Securities Depository Subsidiary Surpasses $100 Trillion in Assets Under Custody,” June 18, 2025
  • SEC Division of Trading and Markets, No-Action Letter to DTC re: Tokenization Services, December 11, 2025
  • SEC Staff Joint Statement on Tokenized Securities, January 28, 2026
  • SEC Release No. 34-105047, Approval of Nasdaq Proposed Rule Change (SR-NASDAQ-2025-072), March 18, 2026
  • ICE, “The New York Stock Exchange Develops Tokenized Securities Platform,” January 19, 2026
  • ICE, “ICE Makes Investment in OKX, Establishing Strategic Relationship,” March 5, 2026
  • NYSE and Securitize, Memorandum of Understanding to Support Tokenized Securities, March 24, 2026
  • SEC Chairman Atkins, Remarks at the Investor Advisory Committee Meeting, March 12, 2026
  • LSEG, “LSEG Advances Next Generation of Digital Markets Infrastructure with On-Chain Settlement,” 2026
  • SEC Rule 17Ad-10, Maintenance of Accurate Securityholder Files, 17 CFR 240.17Ad-10
  • UCC Article 8, Investment Securities, Uniform Commercial Code