BlockBeats News, July 13th - The Securities Transfer Association (STA) sent a letter to the U.S. SEC, urging prioritization of tokenized stocks issued directly by listed companies over third-party issued stock tokens in the development of a tokenized securities regulatory framework. The STA stated that the latter may undermine market integrity and increase investor risk.

The STA stated that company-authorized tokenized stocks are real securities listed in the company's official shareholder registry, granting investors full shareholder rights. On the other hand, stock tokens issued by third parties rely more on the credibility of the issuing platform, exposing them to custody, operational, and counterparty risks. The STA recommended that any future SEC initiatives, pilot programs, or long-term regulatory frameworks for tokenized securities should prioritize the issuer-authorized model. They also called for clear risk disclosure for third-party products to avoid confusion with genuine stocks.

Currently, the global market for tokenized stocks, with a total value of approximately $2 billion, is mostly dominated by third-party models, including products like Ondo Finance and Kraken xStocks. However, companies like Figure and Securitize follow the issuer-authorized model. Dinari, on the other hand, provides tokenized stock services to investors through a custody model.

Furthermore, the STA urged the SEC to collaborate with the Depository Trust & Clearing Corporation (DTCC) to upgrade the Direct Registration System (DRS), enhancing the transfer efficiency between traditional securities and on-chain securities to support the large-scale implementation of tokenized securities.

As institutions such as Coinbase, Robinhood, Nasdaq, and the New York Stock Exchange continue to advance in the tokenized securities space, the SEC's regulatory stance on issuer-authorized and third-party models will be a crucial factor in determining the future development of the U.S. tokenized stock market.