Wall Street Tokenization Race Intensifies as 50 Companies Oppose OKX, NYSE Parent ICE Plans
Summary
- Of the 62 listed companies targeted under the stock tokenization plans from OKX and ICE, 50 have submitted objections to using the SEC's innovation exemption framework.
- JPMorgan, Walmart and Nvidia, among others, are concerned about how stock tokenization could affect existing share prices, liquidity, volatility, shareholder rights and market transparency.
- Nasdaq is pursuing development of its own equity token while maintaining a negative stance on the SEC's experimental tokenization exchange framework, and TSV LLC is preparing tokenized stock trading after securing issuer consent.
Forecast Trend Report by Period
Competition among exchanges over stock tokenization is intensifying in U.S. equity markets. Major listed companies have lodged objections to tokenized stock plans being pursued by OKX and Intercontinental Exchange, the parent of the New York Stock Exchange.
Crypto in America reported on Nov. 2 that 50 companies included in the tokenization proposal from OKX and ICE submitted objections to the use of the U.S. Securities and Exchange Commission's innovation exemption framework.
OKX and ICE initially proposed tokenizing shares of 62 major listed companies. Of those, 43 objected, meaning about 70% of the original target group has pushed back against the plan. Companies opposing the proposal included JPMorgan, Walmart, Nvidia, Coca-Cola and Goldman Sachs.
The companies are concerned about uncertainty over how stock tokenization could affect existing share prices, liquidity and volatility, as well as shareholder rights, asset custody and market transparency.
Some have also alleged that Nasdaq encouraged listed companies to oppose the proposal. An executive at a Nasdaq-listed company said a Nasdaq official urged the company to submit an objection to OKX's stock tokenization plan. Nasdaq declined to comment on the allegation, but reaffirmed its negative stance on the SEC's experimental framework for tokenized exchanges.
Nasdaq is separately working with crypto exchange Kraken this year to develop the Nasdaq Equity Token, a project aimed at moving stocks on-chain within the existing securities regulatory framework. That has fueled views that the dispute is widening into a battle among traditional exchanges for leadership in the tokenization market.
Nineteen companies on the original OKX-ICE target list have yet to object. The initial 30-day notice period is due to end on Nov. 3, after which some stocks could become eligible for trading under the SEC's innovation exemption framework.
Meanwhile, rival platform TSV LLC may begin trading tokenized shares of Nasdaq-listed Canton Strategic Holdings before others. Its initial rollout would cover only that company, and the structure differs from the OKX-ICE plan because it has already secured the issuer's consent.
