Exchanges Draw a Line on Tokenized Equities, Putting the Ball With Regulators

Global exchanges used Monday to send a plainspoken warning about a fast-growing corner of crypto finance: tokens that track listed companies but don’t make their buyers actual shareholders. Their ask to watchdogs was simple—treat these “tokenised stocks” like the securities they mimic, or make it unmistakably clear that they are something else, with different rights and different protections.

The heart of the complaint isn’t anti-technology. Exchanges readily concede that blockchains can settle trades faster, support fractional slices, and run after hours. What they reject is the idea that a token should be sold as a stock when it doesn’t carry the legal baggage of stock ownership—votes, dividends, corporate actions, and the shelter of securities law. In their view, if a customer’s claim ultimately rests on a platform’s terms of service rather than the Companies Act and a transfer agent’s register, regulators need to step in before a marketing pitch morphs into a mis-selling problem.

This line-drawing exercise arrives as tokenisation has become a strategic priority across finance. Some players are taking the long road—seeking licenses, registering entities, and building systems that plug into the existing rulebook so that blockchain settlement lives inside the same protections as traditional trades. Others are racing ahead offshore, issuing synthetic access to U.S. and international equities for foreign users, and promising the kind of 24/7 experience that public markets have never offered. That split is precisely why the exchanges want a uniform answer: otherwise, investors face a patchwork of rights that depend on jurisdiction, venue, and the fine print of a customer agreement.

The ownership question is where theory meets risk. If the “stock” in your wallet is really a promise from a platform that it holds something for you, what happens in a bankruptcy? How are dividends handled? Do you get to vote? Those aren’t edge cases—they’re the everyday mechanics of owning a company. The exchanges’ proposal would settle them in one stroke: either the token is a compliant security with all the rights that implies, or it is clearly labeled as a derivative or depositary-style instrument and regulated as such.

Investors responded by gaming out the consequences. A stricter regime could slow the more speculative, marketing-led token offerings but open the door for regulated players to tokenize real shares under familiar rules. Issuers, too, have skin in the game; few companies relish seeing their brands floated on synthetic tokens they didn’t authorize. A clearer perimeter would help them control how their equity is represented—and protect retail buyers from assuming more than they’re getting.

Regulators now have a choice to make, and the industry has a timeline measured in quarters, not years. If supervisors align standards across borders and insist that “stock is stock” regardless of the ledger, tokenisation’s promise can be tested without sacrificing investor rights. If they delay, the gray zone will keep expanding, and the next market hiccup will turn an abstract policy debate into a very concrete problem for customers. Monday’s message from the exchanges was designed to prevent that—and to put responsibility for the answer where it belongs.