For decades, the concept of owning shares in a company has largely been an indirect one for the average investor. When you buy stocks through a brokerage, you rarely hold the physical certificates yourself. Instead, your shares are often held in what's known as 'street name' by your broker or a central depository like the Depository Trust & Clearing Corporation (DTCC). While convenient, this system means you are the beneficial owner, but the legal owner is often an intermediary. This traditional structure has led some to suggest that you don't truly 'own' your shares in the most direct sense.
However, a groundbreaking shift is underway, promising to redefine equity ownership. Superstate, an SEC-registered transfer agent, has pioneered a system enabling the direct issuance of SEC-registered shares on public blockchains, specifically Ethereum and Solana. This innovation allows for primary sales to settle in stablecoins and records ownership directly onto a transfer agent’s ledger, with the blockchain serving as the master file. This move isn't just a technological upgrade; it's a fundamental change in how investors can interact with their assets, offering a pathway to genuine, wallet-native beneficial ownership.
The Traditional Model: An Ownership Illusion?
The 'street name' convention is deeply embedded in our financial markets. When you invest in a company through a brokerage, your broker holds your shares in their name, or in the name of a nominee company, rather than registering them directly in your name on the company's books. You receive statements and retain all the economic rights, such as dividends and voting power, but the legal title rests with the intermediary. This system, while efficient for processing transactions at scale, introduces layers of complexity and can feel abstract, especially during market disruptions or when considering the ultimate control over one's investments.
Superstate's approach directly addresses this by offering a more transparent and direct form of ownership. Their Direct Issuance Programs allow companies to deliver tokens that represent the same legal equity, complete with all voting and dividend rights. These shares are paid for with stablecoins and delivered to KYC (Know Your Customer) verified wallets at real-time prices. This isn't just 'tokenized stock' in the synthetic sense, which has caused confusion in the past; these are the actual, registered securities, with their ownership directly recorded on a public blockchain.
The first live example of this revolutionary system is Galaxy Digital, which tokenized 32,374 of its SEC-registered common stock (GLXY shares) on Solana through Superstate by early September 2025. This establishes a clear template for on-chain cap tables that seamlessly synchronize with a registered transfer agent, providing a tangible demonstration of this new ownership paradigm.
Superstate's Vision: Direct Issuance, Real-Time Ownership
As an SEC-registered transfer agent, Superstate is uniquely positioned to bridge the gap between traditional securities regulations and blockchain technology. Their model shifts a significant portion of the issuance workflow away from DTCC-centric infrastructure towards public blockchains, all while maintaining crucial transfer agent controls and adhering strictly to securities law obligations.
“A May 2025 staff FAQ acknowledged that a blockchain can serve as the official Master Securityholder File for a registered transfer agent, which provides a regulatory foundation for these cap table models.”
This regulatory clarity is paramount. The SEC's acknowledgement that a blockchain can function as the official Master Securityholder File for a registered transfer agent provides a robust legal and regulatory foundation for these on-chain cap table models. This means that every permitted transfer updates beneficial ownership on the RTA's books, and corporate actions like dividends or stock splits can be efficiently executed through smart contracts administered by the agent.
Paving the Way for Digital Distribution and Trading
The implications of direct on-chain issuance extend beyond mere ownership; they transform how shares can be distributed and traded. Backpack exchange, for instance, has announced plans to list SEC-registered, natively tokenized U.S. equities via an integration with Superstate. Initially, this access will be available to non-U.S. investors, with plans to pursue U.S. broker-dealer and Alternative Trading System (ATS) paths.
This model is significant because it positions KYC-verified wallets and whitelisted order flow as the direct access point for investors, eliminating the need for synthetic wrappers or special purpose vehicle (SPV) structures that can obscure actual ownership. This distinction is vital, especially given past episodes where marketing of tokenized stock created confusion between synthetic exposures and actual registered equity.
The immediate contest in this evolving landscape is control over the cap table and the order books. If the transfer agent and the blockchain truly form the authoritative source of ownership for KYC'd wallets, then secondary trading and distribution can route through a variety of compliant venues that directly interact with this ledger. This opens the door for new competition, with traditional broker-dealers, ATSs, and market centers vying alongside wallet-native venues and whitelisted Automated Market Makers (AMMs) that integrate with transfer agent hooks.
However, the regulatory path for AMMs to trade National Market System (NMS) securities is not yet clearly defined. The SEC has emphasized that tokenization is not a regulatory shortcut, and existing frameworks such as Regulation ATS, fair access, surveillance obligations, and short-sale rules continue to apply to any AMM routing orders in NMS securities. The agency's statements consistently stress that market integrity rules remain sacrosanct.
Mainstream Institutions Join the Tokenization Journey
While Superstate forges new paths, established financial institutions are also exploring blockchain's potential. The DTCC, a cornerstone of traditional securities settlement, has launched a tokenized collateral platform and engaged with the SEC’s Crypto Task Force regarding tokenization services. These initiatives could potentially expand into crucial workflows like pledging and corporate actions.
In a further sign of mainstream acceptance, Nasdaq has filed to enable tokenized securities trading on its main market, provided the rights are equivalent to traditional shares. Reports suggest a timeline as soon as the third quarter of 2026, contingent on the readiness of DTC infrastructure. These parallel efforts by traditional players point towards a hybrid market stage, where DTC-eligible positions will coexist with tokenized cap table entries, facilitated by conversion or pledge functions that bridge the two systems.
The Transformative Benefits of On-Chain Equities
The move to on-chain issuance and ownership offers a suite of compelling advantages:
- Real-time, T≈0 Settlement: Superstate's Direct Issuance allows companies to raise capital directly into wallets, accept stablecoin proceeds, and record new ownership on-chain with virtually instantaneous settlement. This eliminates the multi-day settlement cycles of traditional markets.
- Expanded Market Access: Follow-on offerings and 'at-the-market' programs can operate outside traditional market hours, potentially expanding addressable demand in non-U.S. time zones, especially for small and mid-cap issuers, once compliant venues and KYC pipelines are fully operational.
- Programmable Control: On-chain shares can incorporate programmable constraints, such as transfer restrictions or automated accreditation checks, enhancing compliance and control for issuers.
- Ownership Clarity: For investors, the custody model shifts from omnibus 'street name' accounts at brokers to direct, wallet-native beneficial ownership. This ownership is explicitly tied to the transfer agent’s ledger, subject to necessary whitelisting and rescission powers for regulatory and sanctions compliance.
Navigating Regulatory Waters and the Expanded Role of Transfer Agents
While the path for primary issuance is clearer, secondary trading presents ongoing regulatory considerations. Backpack’s strategy involves a centralized access layer for tokenized stocks outside the U.S., with U.S. flows dependent on broker-dealer and ATS permissions specifically applied to these actual securities. On-chain AMMs, despite their technical elegance, face an unresolved regulatory status for NMS securities.
Looking towards 2026, three potential outcomes for AMMs trading NMS securities emerge: they could be recognized as ATSs, face restrictions leading to centralized order book dominance, or a hybrid scenario where AMMs serve non-NMS or smaller issuers while NMS securities remain on central limit order books. The SEC's consistent stance, echoed in Commissioner statements, is that tokenization must operate within the existing regulatory perimeter, not as a separate, unregulated lane.
In this evolving landscape, the transfer agent’s role becomes increasingly critical. With the blockchain serving as the master securityholder file, transfer agents will mediate whitelist controls, facilitate error correction, handle rescissions, and maintain audit trails for all on-chain transfers. This central position makes them pivotal for corporate actions and governance. Wallets and venues equipped with robust KYC and sanctions tooling will become essential distribution partners, feeding clean data into the master file.
Bridging the Old and the New: A Hybrid Market's Evolution
A practical question for many issuers revolves around the interplay between tokenized shares and existing DTC positions. Currently, DTCC’s tokenization initiatives are focused on collateral, with an eye towards extending to securities workflows. Nasdaq’s filing, similarly, anticipates DTC infrastructure readiness before token-settled trades can seamlessly integrate onto the same order book.
Until a truly seamless conversion path is fully operational, many issuers may opt to maintain parallel rails: utilizing DTC for mainstream exchange trading and leveraging on-chain issuance for targeted capital formation, experimental dividend distributions, or controlled secondary transfers among whitelisted wallets. The speed at which these 'bridges' are developed and adopted will ultimately determine how quickly on-chain liquidity can reach parity with street-name liquidity.
Tracking the Revolution: Key Metrics for Success
Monitoring the progress of this transformation requires attention to several straightforward metrics:
- The number of issuers enrolling in Superstate’s 'Opening Bell' stack.
- The total volume of shares outstanding that become token transferable.
- The growth in the number of on-chain holders recorded on the master file, which Superstate explicitly maintains as a registered transfer agent.
- The monthly volume of primary issuance settling in stablecoins.
- The trading volume routed by Backpack and other compliant venues for tokenized equities, particularly in non-U.S. markets.
- The scalability of DTCC’s tokenized collateral network and the testing of DTC conversion or corporate action bridges for tokenized equity.
Each of these data points will offer insights into whether this represents primarily a settlement upgrade for existing systems or the genesis of an entirely new order flow channel.
The 2026 Outlook: Scenarios for a Tokenized Future
The landscape leading into 2026 is shaped by existing public milestones and operational systems. Galaxy’s tokenization demonstrates the viability of issuing real shares on-chain under transfer agent control. Superstate’s Direct Issuance opens new avenues for wallet-native primary offerings with stablecoin cash legs. Both DTCC and Nasdaq have articulated timelines that suggest tokenized legs could become visible within mainstream market infrastructure by late 2026, assuming the necessary infrastructure alignment.
With SEC staff already having made provisions for on-chain master files, while broader secondary trading permissions remain under review, we are likely to see a hybrid market structure through 2026. This environment will feature stablecoin settlement, whitelisted wallets, and transfer agents anchoring cap tables, all while various venues compete intensely to control the order flow built on top of this innovative new framework.
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