Cantor Fitzgerald plans blockchain IPO share offerings with Securitize

Cantor Fitzgerald is partnering with Securitize to help companies issue shares on a blockchain when they go public, Fortune reported. The move gives a Wall Street backer to a still-small effort to create tokenized equities that can trade continuously and settle more quickly than conventional stock trades.

Securitize, based in New York, specializes in blockchain-native securities that are designed to resemble traditional securities under regulatory rules, according to Fortune. Cantor’s agreement with the firm focuses on stock that companies issue directly in tokenized form, rather than synthetic tokens tied to existing shares.

How the model differs from wrapped stock tokens

Fortune reported that Securitize and rival SuperState use a more technology-heavy approach than the “wrapper” model adopted by firms including Robinhood and Kraken. In the wrapper structure, a firm buys blocks of stock, places them in a special purpose vehicle and issues tokens that track the value of individual shares.

That wrapper approach has drawn controversy because it can involve blockchain versions of popular companies’ shares, such as Tesla or Apple, without those companies taking part, according to Fortune. Under Securitize’s model, the issuer participates directly and controls the tokenized shares it creates.

Most tokenized stock trading so far has used the wrapper model, Fortune reported, with investors in markets including Brazil and South Africa using those products to gain exposure to prominent U.S. stocks. Blockchain-native stock issuance remains limited, with only a small group of companies, including Galaxy, Figure and Securitize, having pursued that route, according to the report.

Cantor sees demand from crypto-native issuers

Ben Boehmke, Cantor’s head of strategies for equities, told Fortune the firm selected Securitize partly because of its compliance-focused approach. He said Cantor expects more companies seeking its help with public listings to be led by crypto-native founders who may be open to issuing shares on a blockchain.

Boehmke said clients and issuers could choose to tokenize a portion of an offering rather than the entire deal. “We also see a thriving market where clients and issuers may be very interested in dipping a toe in the water and doing 5% to 10% of their offering in tokenized form,” he told Fortune.

He also said hedge funds with digital-asset expertise could be interested in an IPO allocation issued in tokenized form. Cantor’s crypto experience includes serving as custodian for reserves of Tether, the largest stablecoin company, and operating funds tied to Bitcoin and tokenized gold, Fortune reported.

Boehmke told Fortune that Cantor’s plans are broader than IPOs. The firm also aims to support other blockchain-native stock transactions, including tender offers.

Securitize expects regulation to shape adoption

Billy Miller, Securitize’s chief operating officer, told Fortune the company’s tokenization model can become more popular because it gives issuers and investors a safer and more reliable way to handle blockchain-based shares than wrapped tokens held through a special purpose vehicle.

Miller said broader adoption is likely once a full regulatory framework is in place, according to Fortune. He also said executives at companies such as Apple are aware that synthetic versions of their shares trade with limited oversight, which could lead them to consider regulated blockchain-native alternatives over time.

This story draws on original reporting from Fortune.