Tokenization has significant potential to transform capital markets, promising real -time regulations, broader access to investors and greater programmability in financial infrastructure. But while rails are evolving, current models for token actions remain fragmented, opaque and poorly aligned with the guarantees that define the traditional securities markets.
Today, there are two dominant approaches:
THE Wrapper model Implies PDI in token which provide synthetic exposure to existing actions rather than direct ownership. These tokens do not grant holders of governance rights or enforceable complaints to underlying actions. Transferability is generally limited to closed ecosystems, liquidity is partitioned on the platforms controlled by transmitter and the regulations can be troubled, many products not available for the United States.
THE Chain emission model means creating a native digital sharing class emitted via the blockchain. Although this approach aligns more closely with the legal definition of security, it introduces operational complexities and scalability challenges. The active participation of the transmitter is compulsory, the liquidity remains fragmented between chain chips and traditional securities and broker standards is incoherent, complicating participation for regulated financial institutions and investors.
What is missing is a model of tokenization that combines the speed, accessibility and component of tokenization with the structure, guarantees and clarity of traditional capital markets. Fortunately, this model already exists elsewhere: Deposit receipts (DRS).
In many ways, the DRs were the original form of tokenization. For more than a century, American deposit receipts (Adrs) have allowed foreign actions to trade in the United States through a regulated structure and supported by the guard. Today, this framework can also fill traditional titles with token infrastructure, offering an evolutionary and legally solid basis for modern actions.
The case for the tokenized DRS
By combining the rails blockchain with the legal and operational framework of DR, market players can unlock a wider participation and active service in real time without compromising investor protections or operational standards.
The other advantages include:
- Preservation of shareholders’ rights
Unlike synthetic packaging, the ADR structure improves the rights of shareholders, which allows them to transmit to token holders. This includes economic entities, such as dividends and other corporate actions, as well as governance rights such as vote.
- Clear segregation of tasks
A regulated bank of the Guardian Bank keeps the underlying actions of a segregated and bankrupt structure, owned only for the benefit of ADR holders. An independent and neutral deposit facilitates the emissions and cancellations of DR, maintains precise records using a transfer agent recorded by the SEC and performs daily reconciliation with the underlying assets. The depositary has no request for property on the underlying shares themselves.
ADRs are recognized as titles under American law. For years, they have been used to allow American investors to own and negotiate foreign actions on the US markets. In addition, the reception structure has been flexible to allow the fractionalization of privileged American actions. Regarding the tokenized titles, Commissioner Hester Peirce in her last declaration on tokenization said that “a token could be a receipt for security”.
- Complete fungibility and market access
The ADRs are fully fungible and exchangeable by their underlying actions, allowing non-taxable conversions the same day. They can be made available to market players and the institutional market which can choose to hold titles in token or traditional form without sacrificing rights or liquidity. The fungibility of ADR is supported by MSCI’s analysis, which indicates that in average, ADRs are negotiated with parity with their underlying local actions.
ADRs can be deployed by both action issuers and secondary market players, improving scalability and adoption – unlike chain emission models that depend on the initiation and active maintenance of transmitters.
A confidence mechanism for the bristing markets
Prove and fully integrated into global finance, the application of the ADR structure to tokenized actions is a logical evolution.
As tokenization ripens, this type of innovation is essential for the scale of adoption and confidence. Just like the dry rule 12G3-2(b) Rationalized access to foreign issuers, a similar regulatory mechanism could unlock larger tokenized stock markets, allowing public companies to offer tokenized actions to American investors in a compliant.
The long -term path does not require inventing a new packaging – it must be adapted a proven. In other words, the bridge between traditional finance and digital infrastructure already exists. He must just be carefully crossed.
