SEC tokenized stock plan targets the register, not the token: Bitget analyst

The SEC has proposed a 60-day rulemaking process to modernize transfer-agent systems for blockchain records as offshore demand for tokenized stocks grows.

Bitget Research Chief Analyst Ryan Lee told crypto.news that the SEC’s proposal addresses a part of tokenized stock markets that has received less attention than trading venues: the official record showing who legally owns each share.

Most tokenized stock products available outside the United States give investors price exposure through a synthetic or custodial structure, Lee said. Under such arrangements, a platform or custodian holds the underlying security, while the investor owns a token carrying a claim against that intermediary.

“The key difference is how ownership is recorded, not the token itself,” Lee said.

In the traditional US market, registered transfer agents maintain issuer records, process ownership changes, and help manage corporate actions. Connecting a token to an authoritative transfer-agent register could allow legal ownership to appear on the same official record used for conventional shares, according to Lee.

SEC tokenized stock proposal modernizes the ownership system

The SEC proposal, published on Sep. 1, would update federal rules and forms governing registered transfer agents. Existing transfer-agent rules have not received a substantial update since the late 1970s and early 1980s, according to the agency.

Under the plan, transfer agents could use electronic communications and blockchain technology when handling securities offerings and share transfers. Proposed changes also cover registration, reporting, recordkeeping, and safeguards for securities and funds.

SEC Chair Paul Atkins said the proposal would update the rules to account for current transfer-agent operations, including the use of blockchain technology. Public comments will remain open for 60 days after the proposal appears in the Federal Register.

Lee cautioned that the rulemaking deals with the systems supporting securities ownership, not the legal status of tokenized shares themselves. Adoption would not automatically establish a token as the underlying security or give its holder voting, dividend, and other shareholder rights.

“It modernizes the plumbing an authoritative tokenized register would eventually need,” Lee said, calling the proposal meaningful while stressing that substantive securities-law questions remain unresolved.

For American investors, the distinction determines whether an onchain product amounts to registered stock ownership or merely financial exposure tied to a listed company. Issuance terms, custody arrangements, and applicable securities laws would still govern investor rights even if a transfer agent stores records on a blockchain.

Offshore volume shows demand is concentrated in active stocks

Bitget recorded $1.16 billion in tokenized-stock trading volume between June 2 and July 19, according to figures provided by the exchange. Non-crypto assets have accounted for about 20% of its total trading volume, indicating that offshore users already trade stock-linked products without a dedicated US tokenization framework.

Citing research from DeFiLlama, Lee said Bitget’s activity centered on semiconductor and technology companies rather than being distributed evenly across more than 500 listed stocks.

The study found that Bitget had a median bid-ask spread of 0.83 basis points, the lowest among five tokenized-equity markets included in the comparison. It also recorded the deepest available liquidity at the top of its order book, according to the research.

Lee described the figures as evidence of demand for efficient trading in selected high-momentum names. However, volume alone does not establish whether users hold the products as long-term investments or repeatedly trade them.

Moving from price access to direct ownership would require clear rules governing legal title and shareholder rights, Lee said. A July tokenized stock study found that the number of holders across five platforms had risen 92% in 30 days to 752,000.

Robinhood accounted for 328,000 holders but only $44 million in assets, producing an average position of about $134. Ondo held $857 million in tokenized equities, while xStocks followed with $487 million, showing that holder counts and capital concentration can present different pictures of adoption.

Shared records could make tokenized shares interchangeable

Legal fungibility between a US-regulated tokenized share and an offshore counterpart would require both products to refer to the same authoritative ownership record, according to Lee. Without such a link, transferring a product between jurisdictions could create a separate instrument rather than move the original security.

Regulators would first need to recognize that a token representing a US-registered security remains the same security when held through an offshore platform. Lee identified cross-border recognition as the hardest condition because jurisdictions have not settled how an offshore holder could own a claim on the same registered share.

Market operators would also need a common or interoperable settlement and registry layer. A transfer would then update one accepted record instead of requiring two independent ledgers to be reconciled after each transaction.

Corporate actions add an operational requirement. Platforms and transfer agents would have to apply dividends, shareholder votes, transfer limits, and regulatory reporting consistently so that an asset does not gain or lose rights when it crosses from one venue to another.

Current products handle such rights in different ways. An August report on xStocks explained how Backed Assets collects voting instructions from token holders and passes them through its custodial structure. Backed remains the beneficial owner of the underlying shares, while token holders receive contractual instruction rights rather than direct registration as shareholders.

Access also varies by jurisdiction. In July, Kraken added selected xStocks as collateral for futures and margin positions, but the service remained limited to eligible users outside the United States. The launch covered ten products, including tokenized versions of Apple, Nvidia, Tesla, the SPDR S&P 500 ETF Trust, and the Invesco QQQ Trust.

Coinbase and Base have pursued another structure. Base founder Jesse Pollak said in July that the companies were preparing tokenized equities backed one-for-one by underlying shares, according to an earlier report on the plan. Coinbase had said its planned non-US products would represent equity ownership and include dividends and shareholder rights, though the companies had not disclosed the proposed custody or registry process.

Transfer-agent control could become a competitive advantage

Control over shareholder records may become more valuable as exchanges compete on fees, liquidity and trading hours, Lee said. Every venue ultimately needs to settle transactions against an accepted ownership register, giving transfer agents a central place in the market structure.

Lee pointed to Bullish’s planned Equiniti acquisition as evidence that companies are directing capital toward registry infrastructure. Announced in May, the $4.2 billion transaction would add a regulated transfer agent to Bullish’s tokenization, trading and market-infrastructure operations.

Equiniti maintains shareholder records for more than 2,500 companies and 20 million shareholders while processing about $500 billion in annual payments. The transaction includes $1.85 billion of assumed debt and roughly $2.35 billion in Bullish stock, according to the deal announcement.

Licensing demands, established issuer relationships and the trust placed in recordkeepers create high entry barriers for transfer-agent services, Lee said. Although the structure could concentrate activity among a limited number of providers, he argued that regulated and interoperable registers could reduce the fragmentation that prevents tokenized shares from becoming fungible.

Under Lee’s preferred model, several authoritative registers would operate under clear oversight and communicate with one another, while exchanges compete through liquidity and execution. The Bullish transaction is expected to close in early 2027, subject to regulatory approvals, with Equiniti’s management retaining responsibility for daily operations, compliance duties and client relationships.