Big US Companies Push Back Against Tokenized Stock Plan at SEC

what happened

According to The Wall Street Journal, citing a regulatory filing, several large US companies are objecting to the Securities and Exchange Commission's plan to bring tokenized stock trading to the country. Broadcom, Verizon and UnitedHealth are among them. In total, nine companies have already opted out, including Cerebras Systems, AppLovin, CoreWeave and Rocket Lab.

Nasdaq, which is building its own tokenization platform, said its shares should not trade on a venue that lacks real-time best prices and consolidated tape reporting. The exchange warned that such trading could drift away from the broader market in pricing and transparency. Citadel Securities raised similar concerns in a letter to the regulator.

Under the SEC rules, a company has 30 days to object before a venue can list its stock. OKXICE, a joint venture of Intercontinental Exchange and OKX, has already notified regulators of plans to launch a platform trading dozens of US-listed companies on the X Layer blockchain.

why it matters

For investors, tokenized versions of shares can diverge from the underlying stocks in price, especially outside trading hours and during low liquidity. That raises the risk of market fragmentation, and the SEC framework is still an experiment that may be revised.

market impact

US large-cap stocks: risk of fragmented liquidity and token prices diverging from the underlying shares

tags

instruments