Wall Street Transfer Agent Lobbying SEC Warns Third-Party Token Threatens Market Integrity
July 14 news, according to CoinDesk: as competition in tokenizing capital markets intensifies, Wall Street transfer agent—Securities Transfer Association (STA)—is actively lobbying the U.S. Securities and Exchange Commission (SEC).
At present, the agency is urging regulators, while drafting rules for tokenizing traditional securities, to prioritize issuer-initiated tokenized securities rather than stock tokens issued by third parties.
In a letter to the SEC, the Securities Transfer Association (STA) emphasized that blockchain stocks should be the actual securities authorized by the issuer and reflected in its official shareholder register, rather than tokens created by unrelated platforms.
The association warned that third-party tokenized stocks may blur investors’ rights and increase platform and custody risks, whereas issuer-initiated tokenized securities could bring substantial benefits to the issuer, investors, and U.S. capital markets—provided that the SEC builds the underlying infrastructure correctly.
Currently, tokenization has become one of the fastest-growing segments in the digital asset sector. Citibank predicts that by the 2030s, tokenized securities could become a $5.5 trillion market, with tokenized stocks reaching $2.6 trillion.
Notably, the tokenized stock market, currently around $2 billion in size, is mainly dominated by third-party models, including related products under Ondo Finance and Kraken; while Securitize, Figure, and others use an issuer-authorized model.
In summary, STA’s stance highlights the contest between traditional finance and the crypto industry over “who controls the definition of on-chain stocks.” In addition, as institutions such as Coinbase, Robinhood, Nasdaq, and DTCC move securities onto the blockchain, this competition is shifting from theory to reality.
In the future, how the SEC distinguishes between “issuer-authorized tokens” and “third-party tokens” may directly determine the direction of the U.S. tokenized securities market. Because this ultimately concerns the legality of on-chain stocks, the standards for compliant trading, and how responsibilities and liabilities among different parties are defined.
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