Fairmint CEO Warns Tokenized Stocks May Recreate the 1960s Paper Crisis

Huoxing Finance reports, according to CoinDesk, Joris Delanoue, CEO of chain-based securities infrastructure provider Fairmint, said that the boom in tokenized stocks could recreate a digital version of the “paperwork crisis” of the late 1960s on Wall Street. At that time, surging trading volumes in U.S. equities overwhelmed back-office systems reliant on physical stock certificates, leading to increased settlement failures; the New York Stock Exchange once halted trading on Wednesdays to clear backlogs, ultimately driving infrastructure reforms such as the establishment of central depositories and the Depository Trust Company. Delanoue noted that the key issue is whether this crisis is being digitally replicated. Exchanges, special purpose vehicles (SPVs), token wrapping, and proprietary ledgers may fragment ownership records during the growth of tokenized stocks. Some products offer only economic exposure to underlying stocks, not legal ownership, leaving investors dependent on intermediaries and exposed to uncertainty regarding voting rights, dividends, and asset claims if the issuer or SPV encounters issues. The global market size for tokenized stocks has grown from under $500 million at the end of Q1 to approximately $2 billion.