Fairmint CEO Warns Tokenized Stocks May Repeat 1960s 'Paperwork Crisis'

ChainCatcher report, according to CoinDesk, Joris Delanoue, CEO of Fairmint, a blockchain-based securities infrastructure provider, said that the boom in tokenized stocks could recreate a digital version of the "paperwork crisis" that plagued Wall Street in the late 1960s. At that time, a surge in U.S. stock trading overwhelmed back-office systems reliant on physical stock certificates, leading to increased settlement failures and forcing the New York Stock Exchange to close on Wednesdays to clear backlogs—ultimately driving reforms such as the establishment of central depositories like 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 for tokenized stocks has grown from less than $500 million at the end of Q1 to approximately $2 billion.