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Transfer agents urge the SEC to favor issuer-sponsored tokenized stocks
The Securities Transfer Association says only issuer-authorized tokens should qualify as true tokenized stock, citing platform and custody risks for third-party models.
CoinDesk reports that the Securities Transfer Association, a trade group for transfer agents that includes major Wall Street institutions, is urging the U.S. Securities and Exchange Commission to give preferential treatment to issuer-sponsored tokenized securities as the agency drafts rules for putting U.S. equities on blockchain rails.
In a letter to the SEC, the group argues that blockchain-based shares should be actual securities authorized by the issuer and recorded in the issuer’s official shareholder registers, rather than tokens created by unaffiliated platforms. The STA says the distinction is fundamental.
The STA also warns that holders of third-party tokenized stocks can face credit, custody, and operational risks tied to the platform that issues those tokens. It contends that issuer-sponsored tokens can benefit issuers, investors, and U.S. capital markets only if regulators set the foundational architecture correctly.
CoinDesk notes that the debate continues as market participants race to build a tokenized securities market, with some stakeholders arguing regulators should differentiate between issuer-backed, custodial structures and synthetic setups. The dispute highlights how different token designs could affect investor rights and market integrity.