Key Highlights
- Five major financial firms launched the Issuer Sponsored Token Coalition to establish tokenization standards
- Initiative focuses on creating frameworks for blockchain-based securities linked to official company registers
- Coalition responds to SEC’s Innovation Exemption granted on September 17 for onchain equity transactions
- Framework designed to maintain traditional shareholder benefits including voting rights and dividend distributions
- Coalition scheduled to convene with corporate issuers at NYSE on October 27
Five leading financial services companies have launched a collaborative coalition aimed at establishing industry-wide standards for blockchain-based stock tokens. The initiative brings together Bullish, Equiniti, Alpaca, Apex Fintech Solutions, and DriveWealth.
Known as the Issuer Sponsored Token Coalition, the alliance was publicly unveiled this Thursday.
The formation was spearheaded by Bullish alongside Equiniti, a shareholder services provider currently in the process of being acquired by Bullish.
Coalition’s Strategic Objectives
The alliance seeks to establish comprehensive technical frameworks for securities tokenization. These frameworks will address settlement processes, custody arrangements, and the mechanisms for transferring securities between conventional financial systems and distributed ledger networks.
Central to their mission is issuer-sponsored tokenization—a model ensuring that digital tokens remain connected to a corporation’s official shareholder registry.
This approach aims to safeguard investor privileges including voting authority, dividend payments, and involvement in corporate governance activities.
The distinction has become increasingly relevant as certain financial instruments provide stock price exposure while failing to deliver authentic ownership rights.
A public exchange between AMC Entertainment’s CEO Adam Aron and Robinhood recently highlighted these concerns. The debate centered on whether alternative or tokenized instruments grant investors equivalent legal standing as officially registered shareholders.
Issuer-sponsored frameworks address this challenge by maintaining a direct connection between tokens and corporate shareholder records.
“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 comes on the heels of significant regulatory developments. On September 17, the U.S. Securities and Exchange Commission introduced an Innovation Exemption.
This exemption permits controlled blockchain-based trading of securities listed on U.S. exchanges. Platforms must verify that tokenized equity instruments preserve identical rights as conventional shares.
The regulatory exemption remains valid for a five-year period.
Alpaca announced its intention to facilitate integration between traditional securities markets and blockchain platforms through its Instant Tokenization Network infrastructure.
“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, which supplies infrastructure to broker-dealers and financial institutions, believes the coalition can facilitate integration between tokenized markets and legacy financial systems.
The coalition has identified four priority areas: protecting shareholder rights, enabling interoperability across traditional and blockchain platforms, developing adoption infrastructure, and fostering an open marketplace ecosystem.
Planned activities include evaluating various blockchain architectures and smart contract designs, analyzing regulatory compliance requirements, and developing initial proof-of-concept systems.
Coalition participants are scheduled to engage with corporate issuers and capital markets executives on October 27 at the New York Stock Exchange.
In May 2026, Bullish announced its agreement to acquire Equiniti in a transaction valued at $4.2 billion.
The merger is projected to finalize in January 2027, pending regulatory clearance.
Coalition membership does not obligate participating firms to enter commercial agreements or endorse particular products.
The coalition remains open to additional market participants who wish to join, according to Thursday’s announcement.
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