Asset tokenization spans real estate, government bonds, funds, raw materials and private credit, but in US capital markets the conversation has sharpened around tokenized securities. When shares, bonds and fund interests are tokenized, the central question is which infrastructure will connect rights records, transfers, settlement, custody, collateral and regulatory reporting.
The SEC set out its position in January: tokenized securities fall within the existing securities framework. Even when shares or bonds are represented as tokens, dividend rights, voting rights, redemption claims, transfer restrictions and investor-protection obligations remain intact. The SEC distinguishes between issuer-led and third-party-led tokenized securities. Third-party-led structures can involve arrangements in which the listed company plays no direct role, raising questions about underlying security ownership, investor rights, dividend and voting treatment, and custody and insolvency risk.
Nasdaq received SEC approval in March to process tokenized securities within its existing exchange infrastructure. Securities eligible for Depository Trust & Clearing Corp. (DTCC) settlement will share the same security identifiers and ticker symbols as conventional securities and settle through DTCC. Order routing, execution, market surveillance and market data will all follow existing frameworks. The US tokenized-securities market is developing by adding a tokenized record format inside the existing securities market and managing it under the same order book, surveillance and settlement rules.
The New York Stock Exchange is also advancing a tokenized-securities platform and standards for digital transfer agents — the function that manages shareholder registries and rights transfers. For tokenized securities to become genuine capital-market products, shareholder registry management, dividend and voting processing, transfer restrictions and investor eligibility verification must all work before 24-hour trading becomes the headline feature. Digital asset exchange Bullish agreed in May to acquire transfer agent Equiniti for $4.2 billion, underscoring the growing value of shareholder registry, dividend and rights-transfer infrastructure.
The DTCC's moves illustrate this shift clearly. Working with more than 50 financial institutions, DTCC is building a tokenization service it aims to launch in October. The service is designed to add tokenized rights records and cross-chain interoperability to the existing depository and settlement structure. Competitive advantage in asset tokenization will come down to who controls the standards for rights and settlement.
Collateral infrastructure is moving in the same direction. DTCC's appchain collateral infrastructure project, developed in partnership with Chainlink, aims to connect collateral providers, receivers, managers, tri-party collateral agents and custodians on a single shared platform. Real-time visibility into collateral location, ownership, availability and transfer history can reduce overcollateralization and liquidity buffers. Tokenization, in other words, is reshaping not just trading but the standards for collateral movement and liquidity management as well.
South Korea risks missing the core market if it approaches tokenized securities solely through the lens of fractional-investment products. What is needed is a redesign of the connective structure linking canonical records, rights determination, transfer agency, custody, settlement, collateral management and regulatory reporting. The roles of the Korea Securities Depository, exchanges, brokerages, banks and custodians also need to be redistributed. The United States is designing asset tokenization as a digital upgrade of existing capital-market infrastructure. South Korea, too, should focus first on restructuring its capital-market operating framework rather than on tokenized products themselves. — Kim Jong-seung, CEO of Xcrypton
kyoung@heraldcorp.com
