The ultimate goal of tokenized stocks is that the token
is a share - just represented on the public blockchain instead of in the databases of companies like Fidelity. So in this respect, it's just changing the record keeping system. We're not quite there yet, but that's the vision.
Why would you do this? Current stock trading often takes a day or so to actually settle - you execute a buy but it doesn't settle immediately. There is room for leverage and counter-party risk to live in that gap.
Tokenized stocks (or any asset) is building towards atomic on-chain settlement - you have stock in MSFT, I have stablecoins, we perform an atomic transfer where you send me MSF and I send you stablecoins. This speeds up the system and eliminates counterparty risk. We each must have the asset ready to trade at this point in time.
The benefit is faster settlement, not keeping capital locked up because of long settlement times and decreasing the space where leverage and counter-party risk can live.
Longer term - this potentially means it could be easier for non-US parties to buy US stocks. I can put my savings in the stock market, but a farmer in a developing country cannot. But with tokenized shares, they could invest in US equities - or even a fraction of a US equity if they cannot afford a full share. So this longer term vision could democratize global access to capital markets.
Why would you do this? Current stock trading often takes a day or so to actually settle - you execute a buy but it doesn't settle immediately. There is room for leverage and counter-party risk to live in that gap.
Tokenized stocks (or any asset) is building towards atomic on-chain settlement - you have stock in MSFT, I have stablecoins, we perform an atomic transfer where you send me MSF and I send you stablecoins. This speeds up the system and eliminates counterparty risk. We each must have the asset ready to trade at this point in time.
The benefit is faster settlement, not keeping capital locked up because of long settlement times and decreasing the space where leverage and counter-party risk can live.
Longer term - this potentially means it could be easier for non-US parties to buy US stocks. I can put my savings in the stock market, but a farmer in a developing country cannot. But with tokenized shares, they could invest in US equities - or even a fraction of a US equity if they cannot afford a full share. So this longer term vision could democratize global access to capital markets.