Answering AAII Member Questions About Tokenized Stocks
By Charles Rotblut, CFA
Several members asked questions and posted comments in response to this month's AAII Journal article “A New Form of Share Ownership: Issuer-Sponsored Tokens.” For those of you who have not read the article yet, stock transfer agent Computershare announced earlier this year that it will support U.S.-listed companies that choose to issue tokenized versions of their stocks.
Issuer-sponsored tokens (ISTs) will be a third form of stock ownership. The other two options are physical stock certificates, when offered, and book-entry shares, such as shares held through the Direct Registration System (DRS).
The move toward tokenized shares involves many of the largest companies in the financial industry. More than 30 financial firms participated in a trial recently in which financial securities such as stocks and bonds were converted into digital tokens. Those companies included BlackRock, CME Group, Goldman Sachs, Invesco, J.P. Morgan, S&P Dow Jones Indices, Vanguard and others.
Here are the paraphrased questions from AAII members and my answers.
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