Global Stock Exchanges Urge Crackdown on Tokenized Stocks

The World Federation of Exchanges (WFE) has called for regulatory action against tokenized stocks, citing risks to investor protection and market stability. In a letter to major financial watchdogs, the WFE warned that blockchain-based equity tokens mimic shares without granting legal ownership or shareholder rights.

Tokenized equities provide synthetic exposure to underlying assets but lack the enforceable ownership and voting rights of traditional securities. Market participants fear these instruments could mislead investors and expose companies to reputational harm if the products fail.

The debate highlights growing tensions between traditional finance and decentralized alternatives. While proponents champion tokenization's efficiency benefits, established exchanges emphasize the need for clear regulatory frameworks to maintain market integrity.