Original ｜Odaily Planet Daily (@OdailyChina）
Author ｜Golem（@web3_golem）
Currently, the biggest obstacle to stock tokenization is no longer regulatory agencies, but the listed companies themselves.
According to an announcement released by OKXICE on November 2, the number of companies opposing the launch of tokenized stocks on OKXICE has risen to 56, including popular US stocks such as Amazon, Tesla, SpaceX, and Nvidia. The dissenting companies account for 90% of the initially proposed 62 companies. These 56 companies have a combined market value of over $31 trillion, approximately 42% of the total market capitalization of the US stock market.
As of the time of publication, 13 companies have not raised objections to OKXICE, including Apple, Strategy, Robinhood, Coinbase, Palantir, Circle, Securitize, BitGo, ServiceNow, GE Vernova, Boeing, Home Depot, and Advanced Micro Devices. Securitize and BitGo have previously stated they do not plan to raise objections.
OKXICE is a joint venture between cryptocurrency exchange OKX and Intercontinental Exchange (ICE), planning to launch stock tokens on X Layer. However, according to the SEC's Stock Tokenization Innovation Exemption Policy in the US, listed companies have the right to object to third-party stock token platforms within 30 days.
OKXICE issued its initial announcement on October 4. If OKXICE sent written notifications to the 62 companies on that day, by the deadline (November 3), only two companies had explicitly supported it, while 90% of the companies clearly opposed it. According to SEC regulations, OKXICE can ultimately only launch 13 US stock tokens.
Although the 30-day objection period starts from the date the listed company receives written notification, it's uncertain that November 3 is the deadline for all companies to raise objections. However, for OKXICE, being able to launch 13 stock tokens is already the best result at this time.
What are listed companies worried about?
So, why are these listed companies so resistant to trading their stocks on third-party platforms? After all, on the surface, stock tokenization provides listed companies with a new trading channel, theoretically able to expand the investor base, extend trading hours, and even bring more liquidity to the stocks. This is also the main argument promoted by the market for stock tokenization.
However, for issuers, an increase in trading channels does not necessarily mean an improvement in the trading ecosystem.
From the perspective of third-party platforms like OKXICE, the more stock tokens that can be launched, the better. A richer selection of underlying assets can better satisfy different users' investment needs and make it easier to form economies of scale to attract more funds and traders to enter; but from the standpoint of listed companies/issuers, launching stock token trading in a trading system that lacks direct control and is relatively independent of traditional securities markets carries risks that far outweigh the incentives.
The objections currently raised by listed companies concentrate on three main concerns: price and liquidity fragmentation, reduced visibility of trading behavior, and the potential for third-party trading results to damage the issuer's market reputation.
Price and liquidity fragmentation
In the traditional stock market, the trading of a stock is primarily concentrated on its listing exchange and related securities markets. Investors can observe price, volume, and buy-sell order changes through a relatively unified market system. However, if third-party platforms also begin to issue and trade corresponding stock tokens, the same company may have multiple trading prices and volume data simultaneously.
Even if the stock token price is anchored to the underlying stock price, it does not mean the quotes on both sides can always remain consistent. When there are differences in trading times, buy-sell depth, and arbitrage efficiency across different markets, price deviations between the tokens and the underlying stocks may occur.
Moreover, for the US stock market, which has the most "capital dominance" globally, many listed companies and issuers question the idea that stock tokens can attract more investors. They tend to believe that liquidity will not automatically increase simply by adding an on-chain trading channel and could even have a counterproductive effect.
If the trading demand that was originally concentrated in the traditional securities market is diverted to multiple platforms, it could lead to a decline in order book depth across markets and widen the bid-ask spreads. For listed companies/issuers, this kind of liquidity fragmentation may ultimately weaken the price discovery efficiency.
Stephen Wink, global co-chair of Latham's fintech industry group, has pointed out that if the trading volume of such stock tokens is low, a major concern for listed companies is price misalignment, which could put pressure on the underlying stock price and send misleading signals to the broader market.
Reduced visibility of trading behavior
Secondly, listed companies are concerned that their real-time understanding of stock trading behaviors may be affected.
The traditional securities market has a relatively mature system for disclosing market data and reporting trading activities, allowing listed companies, investors, and regulatory agencies to observe the transaction prices and volumes of stocks through existing channels. However, when stock tokens trade independently on third-party platforms, this data may not be fully incorporated into the traditional market's aggregated market data system.
Trading of stock tokens on third-party platforms cannot directly enter the data system that issuers have relied on from the securities market. If liquidity truly becomes decentralized to these platforms in the future, listed companies and issuers may no longer accurately reflect the overall trading conditions of their securities across different trading venues within the same data set, including understanding trading scale, participant structure, and specific behaviors.
Nasdaq has publicly stated its intention to withdraw from the TSV tokenization operating framework, as it believes this framework would damage issuers' ability to comprehensively, accurately, and promptly understand their own securities' prices and trading behaviors.
Increased reputational risks
Under the current innovation exemption policy, listed companies only have the right to object after receiving written notice from third-party platforms. If they do not raise objections within 30 days, it implies default consent for the third-party platform to launch stock tokens. This is different from previous cases where crypto platforms launched US stock trading through SPV systems, or directly listed US stock Perps. If problems arise with US stock tokens/contracts, listed companies can distance themselves by claiming ignorance or non-compliance. However, if issues arise with stocks on TSV, listed companies, as tacit supporters, are likely to bear some responsibility.
For example, if a stock token deviates significantly from the underlying stock price due to insufficient liquidity, limited market depth, or technical and operational problems with the platform, ordinary investors may not carefully differentiate the legal relationships and trading mechanisms between the stock and the stock token, instead directly associating this price performance with the listed company itself.
For large market-cap, widely held listed companies, it is clear they are unwilling to bear additional reputational risks just to add a trading channel.
At its core, it's a conflict of interest
However, all of these issues can be addressed one by one, provided that listed companies and issuers are willing to collaborate with TSV. But currently, they do not have any plans for cooperation, primarily due to a lack of incentives.
For listed companies and issuers, agreeing to the TSV platform's launch of stock tokens involves taking on many risks where they only receive the incentive of an additional trading channel (whose effectiveness is uncertain), while benefits such as control and profit distribution (with third parties potentially capturing liquidity/fees) are all monopolized by TSV.
Therefore, rather than supporting TSV, listed companies might as well advance or support a stock tokenization path led by the issuer. The SEC's innovation exemption policy only applies to tokens created by non-affiliated third parties; tokens created by the issuer themselves or their agents do not trigger the 30-day objection window.
Nasdaq is a typical example. Although it has withdrawn from the TSV tokenization operating framework, it is vigorously promoting the Nasdaq Equity Token. By collaborating with Kraken's parent company Payward, Nasdaq has achieved tokenization within the existing exchange framework, ensuring alignment with traditional shares, the same order book, and pilot settlement through DTC, thereby retaining control over ownership, investor identity, and agency processes. Nasdaq CEO Adena Friedman stated in the Q3 earnings report that the Nasdaq Equity Token plan is set to launch in the first half of 2027.
Therefore, in the field of stock tokenization, the traditional market forces formed by listed companies and issuers are indeed competing with the emerging market forces formed by crypto companies. Under the SEC's innovation exemption policy, listed companies and issuers will become entities that are "both athletes and referees." As long as listed companies actively exercise their right to object to third-party tokenization, they can protect their control and interests while obstructing the operations of third-party stock token trading platforms.
This confrontation is not only occurring in the underlying stock space but also in contract markets, with Wall Street and crypto companies fiercely clashing. On November 3, the US CFTC approved the trading of US perpetual contracts on regulated US exchanges. As soon as the policy was implemented, the traditional financial camp led by Citadel Securities and the Chicago Options Exchange quickly filed a lawsuit in federal court, primarily out of concern that perpetual contracts would impact the traditional options market. (Related Read: The Historic Approval of US Stock Perpetual Contracts, Wall Street Giants are Alarmed）
When regulation is no longer the biggest obstacle, the power struggle over stock tokenization and the revolution of traditional finance may have just begun.
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