by Coinstrooper Crypto Articles
Quick Take
  • The company will also tokenize its perpetual preferred stock (FGNXP), which pays regular dividends, making it the first U.S.
  • exchange-listed dividend equity to transition fully onto the crypto rails.
  • The move comes as tokenization of financial instruments, such as equity shares, bonds, and funds, is gaining momentum across crypto markets.
  • Some firms, like FG Nexus, have chosen native tokenization, a structure that gives identical rights to token holders as regular shares.

What Happened

Ethereum-focused digital asset treasury firm FG Nexus (FGNX) said Thursday it has tapped tokenization specialist firm Securitize to let investors hold its common and preferred shares as tokens on the Ethereum blockchain.

"Tokenization is rapidly changing financial markets through increased efficiency and enhanced investor access," said Maja Vujinovic, CEO of Digital Assets at FG Nexus. "By tokenizing our shares, we're embracing blockchain technology to further enhance the shareholder experience while maintaining the highest standards of regulatory compliance."

"Our project with FG Nexus is expected to result in U.S. investors being able to hold real stock, not a synthetic wrapper, with instant settlement, automated compliance and the ability to trade onchain through our regulated ATS," Securitize co-founder and CEO Carlos Domingo said.

SharpLink Gaming (SBET), another ETH treasury firm, also unveiled plans to introduce its stock on Ethereum with tokenization firm Superstate's Opening Bell platform.

Market Context

The process aims to streamline how public equities are owned and traded using blockchain rails, while being subject to the same regulations and rights as regular securities. The tokenized shares will be settled in near instantaneously, tracked on blockchain and transferred through Securitize’s SEC-registered broker-dealer and Alternative Trading System (ATS).

The move comes as tokenization of financial instruments, such as equity shares, bonds, and funds, is gaining momentum across crypto markets.

A wide range of tokenized equity offerings debuted over the past few months, including Robinhood, Gemini, Ondo Finance's Global Markets and xStocks by Kraken and Backed Finance, creating token versions of the largest publicly-traded companies and ETFs. Some firms, like FG Nexus, have chosen native tokenization, a structure that gives identical rights to token holders as regular shares.

Securitize, also known for issuing BlackRock's $4 billion tokenized money market fund, was an early mover in this sector, creating tokens of publicly-traded crypto wallet provider Exodus (EXOD) shares on Algorand in 2021.

Why It Matters

After Securitize's tokenization treatment, shareholders can choose to convert their common stock (FGNX) into Ethereum-based tokens, giving them the same legal rights as traditional shares. The company will also tokenize its perpetual preferred stock (FGNXP), which pays regular dividends, making it the first U.S. exchange-listed dividend equity to transition fully onto the crypto rails.

Shift to onchain

Details

Read more: 'Tokenization is Going to Eat the Entire Financial System' Says Robinhood CEO