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Fairmint CEO warns tokenized stocks could trigger a digital paperwork crisis
Delanoue says tokenized-stock setups that fragment issuer-approved shareholder records could create settlement problems similar to those that drove the U.S. post-trade overhaul in the late 1960s.
Fairmint CEO Joris Delanoue warned that the growing market for tokenized stocks could recreate the “paper crisis” that nearly broke Wall Street’s settlement machinery in the late 1960s, but in digital form, according to an interview with CoinDesk.
Delanoue said the core issue is whether onchain tokens that track stocks are backed by issuer-authorized shareholder registers that correctly recognize the token holder as the legal shareholder.
He cautioned that exchanges, special purpose vehicles, token wrappers, and proprietary ledgers could fragment ownership records as tokenized stocks expand, with some products offering economic exposure rather than actual legal ownership.
Drawing a parallel to 1968, when trading overwhelmed paper-based back offices, Delanoue pointed to settlement failures that contributed to later reforms including centralized securities depositories and the formation of the Depository Trust Company, arguing the industry must prioritize interoperability to avoid repeating the breakdown digitally.