What to know:

• Demand is arriving before ownership: Equity perpetuals grew from ~$16B in 2025 to over $590B in 2026 YTD, yet tokenized equities are just ~$2.1B on-chain, about 0.0014% of global listed equity. Third parties are already tokenizing shares offshore, with or without issuers.
• The model defines what the token is: Three exist: issuer-sponsored (the token is the share, full rights), custodial (an entitlement record, indirect ownership), and synthetic (economic exposure only). Same ticker can mean very different rights and risks.
• Today's infrastructure is costly: A single trade threads through brokers, clearinghouses, depositories, and custodians on a T+1 cycle, leaving issuers a nominee-obscured view of their shareholders. Tokenization collapses that chain by moving the register on-chain.
• The transfer agent is the anchor: It maintains the on-chain register, KYC, corporate actions, and compliance. BLSH is the first NYSE-listed company to place its entire cap table on-chain, via the Equiniti × Bullish platform.
• The legal ground is firming, with limits: SEC guidance, the DTC pilot, and Nasdaq approval place the model within existing securities law. Its constraint is structural: whitelisting preserves full rights but limits movement across permissionless markets.

Overview

Tokenization - the representation of ownership in a real-world asset as a digital token on a shared, programmable ledger - is the structural shift underpinning the move toward continuous, around-the-clock markets. Digital assets already trade 24/7, while foreign-exchange and futures markets operate on near-continuous cycles. Equities are beginning to follow, but how that transition occurs matters.

Progress to date has largely focused on extending trading hours within the existing market structure. Nasdaq has received SEC approval to operate for 23 hours per weekday, while NYSE Arca has proposed a similar 23-hour schedule. 24X National Exchange has also launched, with plans to extend trading to 23 hours a day. At the post-trade level, NSCC introduced 24×5 clearing in June 2026. These developments expand market access, but they do not yet create truly continuous markets: daily and weekend closures remain, and trades continue to rely on batch processing and T+1 settlement.

Longer trading hours can improve market access, liquidity, and the investor experience, but they still rely on legacy clearing and settlement infrastructure. Extending execution hours over a batch-cleared, T+1 backbone can widen the gap between when a trade is completed and when ownership formally changes hands, increasing operational complexity and risk rather than eliminating it. DTCC has made a similar point: genuinely continuous markets will require significant changes to settlement and market infrastructure, with tokenization identified as a potential route forward.

Tokenization enables that transition by making settlement a direct transfer on the ledger itself as assets can be held, transferred, and settled natively, supporting near-instant settlement, programmable corporate actions, fractional ownership, continuous transferability, and a real-time view of the shareholder register.

Adoption is accelerating across tokenized assets and, more recently, tokenized equities - and trading data reflects it. For equities, demand today sits mostly in perpetual futures, which grew from around $16B in 2025 to over $590B in 2026 to date. Perpetuals convey price exposure rather than ownership, so this reflects appetite for exposure to these assets more than on-chain ownership itself - and that appetite is the signal for issuers.

Across all tokenized assets, spot volume - trading of the token itself rather than a derivative contract - rose from $38B in 2025 to over $88B so far in 2026, and on current run-rate is on track to top $145B for the full year. That points to genuine, ownership-based markets already forming at scale. Spot ownership of equities specifically is still small, but if perpetuals are a leading indicator, that gap is precisely where the opportunity lies as the market matures.

This is progressing with or without the underlying issuers, as third parties increasingly create tokenized versions of publicly listed shares in offshore markets - and the strategic choice this creates is explored later in this report.

Why Tokenize: The Cost of Today’s Infrastructure

Equities have undergone one major transformation before as the shift from paper certificates to electronic book-entry ownership - known as dematerialization - reshaped how shares are traded, cleared, and settled. It enabled electronic markets, netting, and the modern settlement system.

However, dematerialization achieved these efficiencies by centralizing ownership records within a securities depository and registering shares through nominees. Rather than holding the asset directly, investors typically hold a beneficial claim recorded in the private databases of brokers, custodians, and other intermediaries.

Digitization improved the speed and mechanics of the market, but it also reinforced the layers between the investor and the underlying asset.

By recording ownership on a shared, programmable ledger, tokenization can reduce the intermediary chain rather than simply make it more efficient. In a digitally native ownership model, the token represents the share itself and can be held and transferred directly, rather than being reflected through multiple layers of custodians and nominees.

How Ownership Moves Today

Today’s equity infrastructure creates recurring costs and operational friction for both issuers and investors as a single trade must pass through a chain of brokers, clearinghouses, depositories, custodians, and transfer agents before settlement is completed and ownership records are updated, as illustrated below.

These layers were originally introduced to manage credit, counterparty, and operational risks in a paper-based market and have since become embedded through successive regulation and established market practice.

Most U.S.-listed shares are registered in the name of Cede & Co., the nominee of the Depository Trust Company, while investors hold indirect beneficial interests through their brokers. As a result, the legal and operational record of ownership is fragmented across multiple intermediaries rather than maintained as a single, real-time view.

This structure creates several recurring costs and constraints:

• Delayed settlement: Settlement remains on a T+1 cycle, tying up capital and leaving counterparty exposure open between trade execution and final settlement.
• Intermediary costs and reconciliation: Each intermediary adds fees, delay, and operational complexity, while maintaining its own ledger that must be reconciled against the others. Some of these costs ultimately reach investors indirectly, including through business models such as payment for order flow that support “commission-free” trading.
• Restricted market access: Trading remains largely confined to exchange hours, while minimum investment thresholds, geographic restrictions, and operational barriers limit access for smaller and non-U.S. investors.
• Limited visibility over the shareholder base: Because most U.S. shares are registered in the name of Cede & Co., rather than individual investors, the issuer’s official register identifies the depository’s nominee but not the beneficial owners beneath it. Identifying and communicating with those holders requires issuers to rely on NOBO lists, which exclude objecting beneficial owners; broker-mediated proxy channels; and quarterly 13F filings that may be reported up to 45 days after quarter-end. The result is a fragmented and often weeks-old view of their shareholder base.
• Limited liquidity for private and restricted shares: Employees, founders, and early investors frequently lack an efficient route to secondary liquidity, while issuers retain the administrative burden of maintaining cap tables, processing transfers, and servicing shareholders.

Tokenization can go further than adding another digital record inside a private intermediary's database: in its fullest form, the asset lives directly on shared, programmable infrastructure, where ownership is recorded, transferred, and administered without the intermediary chain in between.

What Tokenization Offers the Issuer

The benefits below follow from that fullest form - the company sponsoring the token itself. Lighter-touch models deliver only a subset.

• A live and accurate shareholder register: When investor holdings are recorded directly on a shared ledger, the issuer can maintain a real-time view of its ownership base rather than relying on a delayed and nominee-obscured record.
• Programmable corporate actions: Dividends, stock splits, voting, and other corporate actions can be executed directly against the on-chain ownership record rather than processed through multiple intermediaries. Eligibility requirements and transfer restrictions can also be enforced at the token level.
• Direct global distribution: Subject to identity, eligibility, and jurisdictional requirements, verified investors can hold and transfer shares more directly, expanding access beyond exchange hours, geographic barriers, and high minimums.
• Expanded secondary-market access: A transferable token can create a route to liquidity for assets that are difficult to trade today, particularly private or restricted shares. Tokenization alone, however, does not guarantee sufficient demand or an active secondary market.
• Lower record-keeping and reconciliation costs: A shared ownership record can reduce the duplication created by multiple intermediaries maintaining and reconciling separate ledgers. The scale of the saving will depend on the structure: models that preserve much of the existing intermediary chain will also preserve many of its costs.
• A shareholder base the issuer can engage directly: Because a tokenized register identifies holders individually and in real time - rather than through the street-name anonymity and lagging quarterly snapshots of today's system - the issuer can communicate with and recognize its shareholders directly. This opens the potential to extend the kind of engagement companies already run for customers to the shareholder base: recognizing tenure or participation, and administering holder benefits programmatically against the on-chain record. Today most issuers know their customers individually but see their shareholders only as a delayed, anonymized snapshot; a live register begins to close that gap.

These benefits are therefore strongest where the issuer sponsors the token and integrates ownership, compliance, and shareholder servicing into the asset itself. Other structures may reproduce only part of this functionality, as the next section explains.

Different Models of Tokenization

The central question is what the token represents, both legally and operationally. In the strongest model, the token constitutes ownership of the underlying share itself. The associated rights travel with the token, and the token holder is recognized as the shareholder. In weaker structures, the token represents only a claim on shares held elsewhere by another party.

This distinction between ownership and claim is the most important issue for an issuer to understand, because the holder’s rights, risks, protections, and regulatory treatment all follow from it. Two instruments may appear identical on a trading screen while functioning very differently in law and practice. With a true ownership token, the holder owns the share itself, and voting rights, dividends, corporate actions, transfer rights, and investor protections attach to the token and move with it. In a synthetic or third-party wrapper, by contrast, another entity purchases and holds the underlying shares before issuing a token linked to their value. The investor owns a contractual claim against that entity rather than the underlying share, introducing additional counterparty, custody, tracking, and enforcement risks.

The SEC’s January 2026 staff statement confirms that tokenization does not alter a security’s legal status or remove the obligations associated with it, while differentiating issuer-sponsored instruments from third-party structures. In particular, it separates tokens that evidence a direct or indirect ownership interest, including issuer-sponsored and custodial models, from linked securities and security-based swaps that merely reference the performance of an underlying security. Building on that distinction, the tokenized-equity market can be divided into three practical models, summarized below.

Issuer-Sponsored Tokenized Equities

The issuer, or an appointed agent, issues the security directly on a blockchain. In this model, the token carries the same legal rights as a traditional share of the same class, including ownership, voting rights, and dividends. The token holder is the shareholder, and the rights travel with the token.

A tokenized security may, however, be issued as a different class from securities that exist in traditional form. In that case, the rights attached to the token would depend on the terms of that class, rather than on the rights attached to the issuer’s existing shares.

Custodial Tokenized Equities

In this model, the token represents the holder’s indirect interest in the underlying security through a security entitlement. The holder does not own the share directly, but holds it through a securities intermediary, such as a broker-dealer. Economically and functionally, the result is intended to mirror traditional brokerage ownership: the token holder receives the same rights, obligations, and benefits as a shareholder holding the security through an intermediary, rather than directly on the issuer’s register.

Synthetic Tokenized Equities

In this model, a third party tokenizes a security issued by someone else by creating a linked security or derivative that provides synthetic exposure to a referenced share. The token’s price is designed to move with the price of that referenced security, but the investor has no ownership claim or direct rights against the issuer of the underlying share.

That is the key difference from true ownership or entitlement models as a synthetic token may look like the underlying stock on screen, and may even trade under the same or a similar ticker, but the holder owns a contract with the token issuer - not the share itself. The rights, obligations, and benefits attached to the token can therefore differ meaningfully from those of a traditional shareholder.

With real ownership, the investor is primarily exposed to the company’s equity risk but with a synthetic wrapper, additional risks are introduced: counterparty risk against the token issuer or its vehicle, tracking risk if the token fails to mirror the underlying share, and venue risk if pricing occurs on an unregulated or fragmented platform.

Corporate actions such as stock splits, dividends, or distributions may not pass through correctly. A holder could, for example, sit through a ten-for-one split with no corresponding wallet adjustment, even as the real share count and price change underneath them. And where synthetic tokens trade outside national market-system protections, price dislocations can occur.

Two tokens with the same ticker can therefore represent very different instruments and risks and that is why the model matters. Issuer-sponsored tokenization is designed to close these gaps by aligning the token with the underlying security, its rights, and its corporate actions - the model the Bullish × Equiniti platform is built around.

The Market Today

Tokenized equities remain a nascent market in terms of market cap, with just $2.1 billion on-chain - less than 8% of tokenized real-world assets and roughly 0.001% of the $151 trillion global equity market.

The market now spans three distinct models, ranging from issuer-sponsored ownership to third-party synthetic exposure. For issuers, the distinction comes down to a strategic choice: sponsor a regulated on-chain version of your own stock, or allow third parties to define how it is represented and traded.

The table below evaluates each provider from the issuer’s perspective, focusing on control, shareholder outcomes, market reach, and regulatory alignment. The control criteria draw a clear dividing line. Only the issuer-sponsored models - Equiniti × Bullish, Securitize, and Superstate - allow the token itself to represent the share, preserve issuer control of the shareholder register, and carry full shareholder rights. Synthetic wrappers sacrifice those features in exchange for broader composability.

Within the issuer-sponsored category, the key differentiator is the market infrastructure supporting the token. Issuance is relatively straightforward; liquidity and distribution remain the real constraints. Equiniti × Bullish is the only model designed to combine an at-scale transfer agent with institutional-grade exchange infrastructure across U.S. and non-U.S. venues, interoperable with existing depository systems.

Today Equiniti's transfer-agent, depository-interoperability, and share-services capabilities are live for traditional shares; the tokenized secondary venue (approved in Gibraltar for non-U.S. investors) and the U.S. ATS are being rolled out through 2026. Because Equiniti is already an at-scale transfer agent maintaining the certificated registers for its existing issuer base, the same platform can support traditional and tokenized shares in parallel. For an issuer already using Equiniti, tokenization becomes an extension of the current registrar relationship rather than a migration or a new vendor - an advantage the newer, digital-native issuance platforms do not carry to the same degree.

How Issuer-Sponsored Tokenization Works in Practice

The transfer agent sits at the end of the ownership-recording chain, maintaining the official register of a company’s shareholders. Brokers, clearinghouses, and depositories facilitate trading, custody, and settlement, but the transfer agent is ultimately responsible for recording legal ownership.

This makes the transfer agent the natural anchor for issuer-sponsored tokenization. Rather than removing the transfer agent, tokenization places it at the centre of the model. Ownership records are maintained on a blockchain instead of solely within a private database: the token represents the share, the blockchain serves as the register, and the transfer agent remains the regulated party responsible for ensuring that the record is accurate, compliant, and legally recognized. Much of the upstream intermediary infrastructure can therefore become optional.

BLSH as a Worked Example

Bullish’s definitive agreement to acquire Equiniti, announced in May 2026 at a valuation of $4.2 billion, illustrates how this model could operate at scale. Equiniti already supports nearly 3,000 issuers and maintains records for more than 20 million verified shareholders. A transfer agent with that reach can extend tokenized infrastructure to its existing issuer base and approve existing shareholders to participate, rather than requiring each company to build the necessary systems independently.

BLSH, Bullish’s own listed equity, provides the first working example of the model and represents the first time a NYSE-listed company has placed its entire capitalization table on-chain. At Consensus Miami 2026, Bullish demonstrated the system live when CEO Tom Farley transferred BLSH directly from one wallet to another within seconds, without a broker or other intermediary facilitating the transaction.

The model has since moved from demonstration to live trading as on August 12, 2026, several market participants executed trades of tokenized BLSH shares on Bullish Exchange, settled against a USD stablecoin - the first time tokenized equity has traded on a GFSC-regulated digital-asset exchange. Wintermute provided liquidity at launch, alongside institutional participants including Qube Research & Technologies, Annamite Capital, and Fasanara Digital.

Because Bullish Exchange runs 24/7 with near-instant settlement in place of the T+1 batch cycle, trades can execute and settle outside conventional market hours - one of the clearest demonstrations of what tokenized securities enable. Bullish framed the listing as a regulated template intended to extend beyond its own shares to a broader range of securities over time.

The BLSH token illustrates the model in four steps:

• Issuance: Bullish, working with Equiniti as its transfer agent, issues a digital token on the Solana blockchain representing an actual BLSH share. The token is not a receipt, derivative, or synthetic claim: it is the share itself, with the blockchain serving as the official ownership record rather than a conventional private database.
• Onboarding: Shareholders who choose to hold BLSH in tokenized form register through Equiniti’s Shareholder Central platform, complete identity verification, and have their digital wallets approved. This whitelisting process ensures that only verified and eligible investors can hold or receive the shares, allowing the issuer and transfer agent to maintain an accurate record of ownership.
• Self-custody and transfer: Approved shareholders can move BLSH from a brokerage account into their own wallet and transfer it directly to another whitelisted wallet at any time. Settlement takes seconds. Because the token is the real registered share, the holder remains the shareholder of record, with voting, dividend, and other rights administered through Equiniti as transfer agent.
• Real-time register updates: Every transfer automatically updates the official ownership record. There is no separate reconciliation process because the blockchain and the shareholder register operate as a single system. Bullish can therefore maintain a real-time view of its verified shareholder base.

The diagram below traces the complete process: how a conventional share is represented on-chain, how an investor becomes eligible to hold it, and how the token can be used once ownership has been approved.

What This Requires From The Issuer

The operational burden - maintaining the on-chain register, conducting KYC and wallet whitelisting, processing corporate actions, and managing compliance - rests with the transfer agent, not the issuer. For a company already using that transfer agent, tokenization is an extension of the existing relationship rather than a new infrastructure project. It does not require changing registrars or building blockchain capabilities in-house.

The issuer’s role is primarily to make a small number of board- and counsel-level decisions:

• Authorize the transfer agent to maintain the shareholder register on-chain.
• Decide whether to tokenize the existing share class or create a new class with distinct terms.
• Approve the investor access framework, including KYC, whitelisting, and transfer restrictions.
• Confirm the regulatory structure with securities counsel and select the blockchain and trading venue.

Equiniti states that, following board approval, the register can be tokenized within roughly a week: the issuer approves once, and Equiniti and Bullish handle the steps that follow - creating the on-chain representation, matching the token supply one-to-one to the shares on the register, and giving each shareholder the choice to hold in book-entry or tokenized form.

Tokenization changes how ownership is recorded and transferred, not the legal status of the security. The shares therefore remain subject to the company’s existing registration or exemption framework.

The Equiniti x Bullish platform

Issuer-sponsored tokenisation requires several regulated infrastructure roles to support U.S. equities at scale. The Equiniti × Bullish model brings together a transfer agent to maintain the authoritative ownership record and an ATS to facilitate regulated secondary trading, while a U.S. broker-dealer capability is expected to support distribution and custody once operational. Recent developments, including UCC Article 12 and SEC staff guidance on digital-asset custody, have made this broader structure increasingly workable.

The platform combines Equiniti’s registered transfer-agent and regulated share-services capabilities with Bullish’s digital-asset market infrastructure, built around licensing, compliance, and institutional market standards. This is designed to provide a unified ledger for tokenized and certificated shares, with on-chain corporate actions, proxy voting, secondary-market trading, and depository interoperability for the tokenized product being rolled out through 2026.

The challenge is not simply issuing a token. It is maintaining the legally authoritative register, safeguarding assets, administering shareholder rights, and enabling compliant distribution and trading. Equiniti already performs these functions at scale.

Pairing that capability with Bullish’s digital-asset infrastructure is what differentiates the model. Rather than beginning with a blockchain and adding the necessary regulated functions afterwards, the platform starts with trusted registry and market infrastructure, then uses blockchain technology to extend how shares can be held, transferred, and traded.

These capabilities are already live: In August 2026, Equiniti and Bullish completed a dividend for Elemental Royalty Corp. in which eligible holders could elect to receive their payout in Tether Gold (XAU₮). The shares themselves weren't tokenised, but it is an early, real-world example of the same rails running an on-register corporate action - the programmable distribution that issuer-sponsored tokenisation is built to extend to shares.

What Comes Next: Composability

Once a share exists as a native on-chain asset, it can potentially interact with the broader financial system - used as collateral, lent, or integrated into other applications without relying on a broker at each step. This interoperability, known as composability, represents the longer-term potential of tokenized equity beyond simply digitizing the ownership record.

For now, however, composability is concentrated largely in permissionless synthetic wrapper models rather than issuer-sponsored structures. Tokenized equities account for less than 8% of the $27 billion active on-chain RWA market, excluding stablecoins and governance tokens. The deepest integration - particularly assets used as collateral in lending protocols or across DeFi - comes from products such as xStocks and Ondo’s tokenized equities, which provide synthetic exposure rather than direct ownership of the underlying shares.

Binance’s bStocks, for example, can be used as collateral in lending protocols on BNB Chain. Issuer-sponsored models such as BLSH are intentionally more constrained: wallet whitelisting is a legal requirement, and unrestricted movement into permissionless DeFi protocols would be difficult to reconcile with securities-law transfer restrictions.

This creates a clear trade-off as wrapper models already provide greater composability, but typically do so without full shareholder rights and with additional market risks. xStocks’ documentation, for instance, notes that token prices may diverge from the underlying shares when U.S. markets are closed, liquidity is thin, or reference pricing is stale. Issuer-sponsored models preserve direct ownership and full shareholder rights, but limit how freely the token can move across the on-chain ecosystem.

Direct holders also assume responsibility for wallet security and key management, while the model depends on the reliability of the underlying blockchain and smart contracts. The regulated register, however, mitigates the most severe custody risk: because the transfer agent maintains the authoritative ownership record, losing a private key does not necessarily mean losing the share itself. These constraints do not weaken the case for issuer-sponsored tokenization; they define its current operating boundaries.

The Regulatory Picture

The regulatory foundation for tokenized equities is increasingly taking shape within existing securities law, rather than through an entirely new framework:

• December 2025: The SEC’s Division of Trading and Markets issued a no-action letter allowing DTC to develop tokenization services through a pilot programme.
• January 2026: An SEC staff statement on tokenized securities established a clearer taxonomy for different forms of on-chain ownership.
• March 2026: The SEC approved Nasdaq’s proposal to trade tokenized securities alongside conventional shares, with settlement through the DTC pilot.
• July 2026: DTCC completed its first live production transactions using DTC-tokenized assets, ahead of the service’s planned broader launch in October 2026.
• September 2026: The SEC issued the "Innovation Exemption," a five-year temporary order permitting qualifying Tokenized Securities Venues to trade tokenized NMS stock on-chain via permissioned AMMs - with an issuer veto over third-party tokenization and no relief for the tokenizing entity itself.

The legal treatment of a tokenized share is therefore increasingly clear, but not unrestricted. As the SEC’s January 2026 statement reinforced, tokenization does not alter a security’s registration, disclosure, or transfer-restriction obligations. The remaining uncertainty is narrower and concentrated in models operating closer to the boundaries of existing securities law.

• U.S. access remains limited: Tokenized equities issued on public blockchains are still generally restricted to non-U.S. investors under Regulation S or accredited investors under Regulation D. Broader U.S. retail access would require additional regulatory action.
• Third-party tokenization now has a conditional pathway: The SEC's September 2026 Innovation Exemption opened a route for on-chain trading of tokenized stock, but on issuer-protective terms: it excludes purely synthetic instruments, gives issuers a veto over third-party tokenization of their shares, and remains temporary pending possible permanent rulemaking.
• The legislative framework is not yet settled: The CLARITY Act, which would have given the emerging regulatory approach greater statutory durability, failed a Senate cloture vote in September 2026, leaving comprehensive market-structure legislation stalled and the framework dependent on SEC and CFTC action rather than statute. This leaves some risk that the approach could shift with future political or regulatory priorities.

These unresolved issues primarily affect synthetic and third-party models operating at the edge of securities law. Issuer-sponsored tokenization rests on firmer ground because it works within established registration, disclosure, and transfer-agent requirements and does not depend on new legislation to be viable.

Its principal constraint is therefore structural rather than legal. The model deliberately limits who can hold and transfer the token - the trade-off required to preserve direct ownership and full shareholder rights within the existing securities framework.

What It Means for Issuers

For issuers, the path to tokenized equity begins with a party they already rely on: the transfer agent responsible for maintaining the shareholder register. Tokenization does not remove that role; it brings it on-chain. The decision is therefore less about adopting an unfamiliar technology than extending an existing relationship onto shared infrastructure - and choosing whether to shape how the company’s shares trade on-chain or leave that role to third parties already offering synthetic exposure without shareholder rights.

Issuer-sponsored tokenization provides a more direct alternative as the token represents the share itself, carries full shareholder rights, and updates the official register in real time, all within the existing securities-law framework. Its limitations are deliberate: the identity checks and transfer controls that preserve regulatory compliance also restrict how freely the token can move across permissionless markets.

Issuance alone, however, does not create a functioning market given the model is only as strong as the register behind the token and the venue supporting it: an authoritative system of record and sufficient liquidity to make the asset practical to hold and trade.

Dematerialization modernized how shares trade, clear, and settle, but left investors holding ownership indirectly through layers of intermediaries. Tokenization takes the next step by placing ownership records on shared, programmable infrastructure and, in the issuer-sponsored model, allowing the token to represent the share itself rather than a claim several layers removed from it.

As regulation, infrastructure, and market participation mature, this may increasingly become the standard way shares are held and transferred.