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Issuer Tokens are the way!

Great work by the @SECGov. Respects the role of the issuer and recognizes not all tokens are actually stock… This was worth the wait…

This morning after the failure of the Clarity Act, I remembered the first real conversation I ever had about the future of blockchain and smart contracts in summer of 2013. @dwr said to me that he could envision a world where the stock markets moved onto public blockchains. Seemed crazy but not impossible. I was headed to go run the largest stock market in the world, the NYSE. I invested $10m in Coinbase as a bit of a hedge and to make sure I wasn’t missing a big trend. The Clarity Act originally came about when crypto volumes and the number of interesting tokens were booming. Let’s face it, we all thought we were headed towards a world with tons of important coins. Today the future of pure crypto is more circumscribed: bitcoin, a couple dozen important layer 1’s/2’s and a handful of productive projects. But the future of blockchain technology is far bigger and more interesting than most people foresaw even a year ago. In particular, tokenized securities including equity and debt are moving to public blockchains. The current projections are all way too low. There will be $150 trillion of assets on chain in 2035 and maybe sooner. Issuers will be in control of this transition and the issuers will have benefits that seemed Jetsons-esque a few years ago: the ability to know their holders; to reward them with rewards, discounts & enhanced voting rights and dividends; and to end naked short-selling. And then there is what is genuinely new. Lower cost structures unlock retail lending products that were previously institutional-only. Equities as tokens become building blocks: bundle them, recombine them, create investment products that simply couldn't exist before. 24/7, settlement, and transparency are table stakes. The more interesting story is what's next. Clarity Act doesn’t have much to do with any of this tbh. On my call with management this morning I lamented that we didnt get Clarity Act yesterday in particular because I thought tradfi big banks would invest more in crypto if they felt the security of federal legislation. But then I asked the team if not getting the bill hurts our existing business in a material way. The answer was no. In fact, some of the stuff in the bill scared me a bit like the prohibitions on stablecoin operators paying rewards. So, like, goodbye Clarity Act, we hardly knew you. With the world we are in in 2026 and not 2024, CLARITY still matters. Durable legislation would give the digital asset industry greater certainty. But even with legislation, the real work of implementation happens at the agencies, and agencies can move faster. For tokenized securities, the @SECGov innovation exemption and @CFTC rule changes may prove more consequential in the near term. They are where the role of the issuer, the issuer-sponsored token and the transfer agent will start to take shape. @Bullish will do its part. We will tokenize 3,000 issuers with the real thing: issuer tokens where the token is the stock itself and not any of this complicated stuff everyone else is writing white papers and drawing diagrams about. Here is our white paper “token = stock.” This is what the issuers and the investors want. I’ll tell you publicly what people are saying privately: issuer sponsored tokens are the best answer, not this soup of synthetic derivative products. Back to working to build the best institutional-grade systems for issuers in the world

I went through the SEC’s proposed TA rule. The SEC is moving at warp speed to embrace the modernization of markets and a future with a blockchain-based infrastructure. I also appreciate that they are embracing the important role that transfer agents play in modern markets.

What Nikki says

Issuers HATE synthetic tokens. Since we announced @Equiniti acquisition we have been out talking to as many issuers as possible and are yet to find a single one who likes people marketing synthetics as “stock” of their company. One CFO of a well known company. told me last week they sent a cease and desist letter earlier that morning. But synthetics have at least proven demand for tokens. The next wave is issuer sponsored tokens. It is a big big wave.

Joined @SquawkStreet this morning to talk Bullish Q2 earnings (revenue beat, guidance up), tokenized stock trading, and the crypto regulatory picture. Lots to cover, excited for where we’re going, interview below!

I used to read the @wsj cover-to-cover every day. It has turned into a tabloid. A front page 14-year-old hit job with ZERO NAMED SOURCES. Sad. They’ve lost their journalistic compass.

I’m not 100pct convinced that the Wall Street banks objections to stablecoin yield in the Clarity Act are entirely because they are worried about deposit flight at small, community banks

Excellent piece by @sndr_krisztian about tokenization and a push to rein in synthetic token chaos

Regulated infrastructure isn't the enemy of innovation. It's the prerequisite for scale. Last week bullish received GFSC approval to bring the benefits of tokenization to securities markets. End-to-end, regulated, global.

My friend and partner Frank Baker making the case for blockchain's potential to bring underserved communities into the financial system. Recognizing @Sen_Alsobrooks for her leadership on the policy that can make it real.

Me too. It is coming

It turns out these synthetic tokens were also not authentic shares of SpaceX. This is ridiculous. Just require that if for someone to say they are offering token shares, either they are actual shares issued as tokens by the issuers themselves or the knuckleheads issuing the tokens have filed with the SEC or comparable to offer a derivative. It’s not that hard.

In other synthetic token news, an exchange says they can’t get their synthetic token holders real exposure for a company going public on another exchange because, well, the synthetic tokens turned out to be not real shares. Or something like that. Maybe tokens should actually be approved by the issuer and therefore be the actual underlying share. Just a thought.