Key Highlights
- Five major financial institutions launched the Issuer Sponsored Token Coalition to standardize blockchain-based securities
- Coalition will develop frameworks ensuring tokenized assets maintain connection to official company registers
- Initiative emerges after SEC introduced Innovation Exemption enabling limited onchain equity transactions in September
- Framework prioritizes maintaining essential shareholder privileges including voting authority and dividend distribution
- Coalition scheduled to convene with corporate issuers at NYSE headquarters in late October
An alliance of prominent financial institutions has established a new coalition dedicated to creating uniform standards for blockchain-based equity securities. The partnership brings together Bullish, Equiniti, Alpaca, Apex Fintech Solutions, and DriveWealth.
Unveiled on Thursday, the initiative operates under the name Issuer Sponsored Token Coalition.
Bullish and Equiniti spearheaded the formation of this collaborative effort. Equiniti, specializing in shareholder administration services, is currently being acquired by Bullish.
Coalition’s Strategic Objectives
The alliance intends to establish comprehensive technical frameworks for securities represented on blockchain platforms. These protocols will address settlement procedures, asset custody arrangements, and mechanisms enabling transfers between conventional financial systems and distributed ledger networks.
Central to their mission is issuer-sponsored tokenization methodology. Under this approach, each digital token maintains an authenticated connection to the issuing corporation’s authorized shareholder registry.
This framework aims to safeguard fundamental investor privileges including voting authority and dividend entitlements. It additionally encompasses shareholder participation in essential corporate events.
The matter has gained significant prominence in recent discussions. Certain financial products provide exposure to equity price movements while failing to grant purchasers legitimate ownership status.
A public dispute between AMC Entertainment’s CEO Adam Aron and Robinhood highlighted this concern. The controversy centered on whether derivative or tokenized instruments confer identical legal standing as officially registered shareholdings.
Issuer-sponsored frameworks seek to eliminate this discrepancy. The digital representation maintains direct linkage to corporate recordkeeping systems.
“The architecture we establish now matters and that is why we are bringing together this group of leading firms to chart the course,” said Tom Farley, CEO of Bullish.
Regulatory Context Behind the Initiative
The coalition’s formation coincides with a significant regulatory development. The U.S. Securities and Exchange Commission introduced an Innovation Exemption on September 17.
This regulatory allowance permits restricted blockchain-based transactions involving U.S.-listed equities. Platforms must verify that digital tokens preserve identical rights as conventional share certificates.
The exemption remains effective for a five-year period.
Alpaca announced intentions to facilitate integration between traditional securities infrastructure and blockchain-based marketplaces. The company will leverage its Instant Tokenization Network for implementation.
“Getting it right means preserving shareholder rights and ensuring onchain markets remain connected to the markets they’re built on,” said Arush Sehgal, head of digital assets at Alpaca.
Apex Fintech Solutions delivers foundational technology for broker-dealers and financial service providers. The organization stated the coalition could facilitate integration between tokenized marketplaces and legacy financial systems.
The collaborative effort will concentrate on four primary domains. These include shareholder privilege protection, compatibility between traditional and blockchain infrastructure, implementation frameworks, and development of an accessible marketplace environment.
Activities will encompass analysis of blockchain technology architectures and smart contract protocols. The coalition will additionally examine regulatory compliance requirements and develop preliminary working models.
Coalition participants are scheduled to engage with corporate issuers and capital market executives on October 27. This gathering will occur at the New York Stock Exchange facilities.
Bullish announced an agreement in May 2026 to purchase Equiniti. The transaction carries a valuation of $4.2 billion.
The acquisition anticipates completion in January 2027. Regulatory authorization remains pending.
Coalition membership does not obligate participating organizations to execute commercial agreements. Participation likewise does not constitute endorsement of particular products or services.
Additional market participants may seek coalition membership subsequently, the announcement indicated.
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