What Are Tokenized Stocks? How They Differ from Real Stocks and Why Companies Are Objecting

While browsing a crypto app, you may have come across tokens carrying names like Microsoft or McDonald's and wondered, "If I buy this, have I bought that company's stock?" Recently, even the company that owns the New York Stock Exchange has been preparing to offer this kind of trading, yet many of the companies that actually issued those shares have come out against it. With blockchain, regulation, and exchange structure all tangled together, it can look complicated, but broken down into a few questions, it isn't that hard.

In this post, we'll start by explaining how tokenized stocks are created and how they differ from real stocks. Then we'll look, in turn, at why the consent of listed companies has become a point of contention and what risks US regulators are watching closely.

What Tokenized Stocks Are and How They're Issued

Tokenized stocks are shares made tradable in the form of tokens on a blockchain. You can think of it as handling the recordkeeping and settlement of stock trades on a blockchain instead of on a brokerage's systems.

A common approach is for someone to buy real shares, hold them in custody, and issue the same number of tokens. It's similar to leaving your coat at a coat check and getting a numbered ticket. With the ticket, you can get your coat back, but the ticket itself isn't the coat. Whether the coat check actually has the coat, and what it has promised to return to whoever holds the ticket, determine the ticket's value.

Let's say a custodian holds 100 real shares and issues 100 tokens. Each token is designed to track one share, but the name that goes on the shareholder register is the custodian's. Token holders are connected to the shares only indirectly, through their arrangement with the custodian.

Tokenized Stocks vs. Real Stocks: Dividends and Voting Rights

The first difference to check is shareholder rights. If you own real shares, you receive dividends and can vote at shareholder meetings. With tokenized stocks, depending on the structure, these rights are sometimes passed on to token holders, and sometimes the token only tracks the price, with the rights left out.

Dave Hendricks, CEO of tokenization firm Vertalo, listed the questions companies are asking: Who holds the shares behind the token? How are dividends and voting rights passed on to token holders? And what does the transfer agent see? A transfer agent is the institution that records who a company's shareholders are, and no matter how many times a token changes hands on the blockchain, that record may show only the single custodian.

That's why two "Microsoft tokens" can be completely different products if their issuance structures differ. This is why you should look at the custodian, how rights are passed on, and the redemption terms before the token's name.

The SEC Innovation Exemption and the 30-Day Objection Process for Issuers

The US Securities and Exchange Commission (SEC) has created a five-year "Innovation Exemption." It allows qualifying Tokenized Securities Venues (TSVs) to trial trading of tokenized stocks using Automated Market Makers (AMMs). An automated market maker is a method in which, instead of people posting quotes, software executes trades according to set rules from a pool of pooled assets.

Under this framework, a venue must notify the company that issued the shares before trading begins and give it 30 days to object. If the company says nothing, trading can begin. Law firm Latham & Watkins warned companies that this silence effectively becomes an irreversible decision, because the SEC order contains no procedure for objecting after the 30 days have passed, or for withdrawing an earlier decision not to object once trading has started.

Why 22 Companies Objected to OKX and ICE's Tokenized Stocks

The first to send notices to companies under this framework was OKXICE, a joint venture between crypto exchange OKX and Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange. The plan is to use Uniswap liquidity pools on OKX's X Layer blockchain and to settle in stablecoins. The initial list of proposed trading targets covered 62 companies.

So far, 22 companies have publicly objected. Following Microsoft, Alphabet, Goldman Sachs, and McDonald's, names such as Wells Fargo, Cisco, Marvell, Arm, Intuit, and Moderna have joined the list. However, Wells Fargo, Arm, and Cerebras were not on the original list of 62, so not all 22 have dropped out of the trading lineup. Also, an objection only blocks trading on the venue that sent the notice; it doesn't mean these companies oppose every form of tokenization.

Run the numbers from a company's point of view, and objecting easily becomes the rational choice. If you receive a notice about an unfamiliar new market structure and can't get answers to the questions above within 30 days, it's safer to object for now. Olivia Vande Woude, head of tokenization at Ava Labs, also expected the list of objectors to keep growing, since objecting costs nothing and silence is treated as consent. Reid Noch of TD Securities said that while demand from overseas investors could grow, the bigger problem is that the benefit to companies is hard to put a number on.

Even Nasdaq, which supports tokenization, said it plans to object for its own shares. The reason isn't tokenization itself but market structure. If tokenized securities venues operate outside the US National Market System (NMS), liquidity could fragment and price discovery could weaken. Nasdaq also pointed out the lack of safeguards such as real-time display of the best bid and offer and reporting to the consolidated tape. Nasdaq is separately pursuing an approach that keeps tokenized securities within the existing exchange framework.

It's not all objections. Tokenized securities firm Securitize and digital asset custodian BitGo said they would not object. Keep in mind that both companies stand to benefit if the tokenization market grows. Andrew Cuomo, co-chair of OKXICE, said he had expected many companies to prefer watching rather than participating at first, describing the framework, which limits participating companies and trading volume, as a kind of "sandbox."

Tokenized Stock Risks in the SEC's 2027 Examination Priorities

The SEC has included securities tokenization in its examination priorities for fiscal year 2027. In examinations under Regulation SCI, which covers the security and stability of core market infrastructure, it plans to look at tokenization as an emerging trend alongside artificial intelligence, extended trading hours, and quantum computing.

The SEC also named tokenization a high-risk area in clearing agency examinations. The other items on the same list are default management, securities lending, and operational risk. In other words, it sees tokenization as a potential new operational risk at the institutions responsible for making sure money and securities move properly after a trade is executed. This also ties into the thin liquidity and 24-hour trading that companies worry about, and the issue of safeguards outside the existing market that Nasdaq raised.

A Checklist for Tokenized Stocks and Key Takeaways

Tokenized stocks are often created by holding real shares in custody and issuing an equal number of tokens, and whether dividends and voting rights come along varies by structure. Under the SEC Innovation Exemption, if an issuer doesn't object within 30 days, trading begins and can't be reversed, so the 22 companies objecting to OKXICE reflects caution more than a rejection of tokenization. Regulators are mainly focused on operational risk in market infrastructure and the clearing stage.

When you come across tokenized stocks, you can check them in the following order.

Who holds the real shares behind the token
Whether dividends and voting rights are passed on to token holders
Whether the trading venue is inside or outside the existing securities market framework
Whether the issuing company has objected to trading on that venue

Even if a token carries a company's name, that doesn't mean it gives you the same rights as that company's stock.