TLDR
- Galaxy Digital (GLXY) becomes the first Nasdaq-listed company to tokenize its actual Class A common shares on the Solana blockchain through Superstate’s platform
- 21 investors have already tokenized 32,374 shares, with tokens representing real ownership rights rather than synthetic derivatives
- The tokenization allows 24/7 global trading and near-instant settlement, though Automated Market Makers aren’t yet approved by the SEC
- Galaxy worked directly with SEC regulators and believes the initiative complies with existing laws while pushing boundaries
- The move comes as tokenized stock market reaches $341 million total value, growing 380% since 2022
Galaxy Digital made history this week by becoming the first Nasdaq-listed company to tokenize its actual common stock. The crypto-finance and data-center company partnered with Superstate to put its Class A shares on the Solana blockchain.
The tokenization went live Tuesday with 21 investors already participating. These early adopters have tokenized 32,374 shares through Superstate’s Opening Bell platform.
Unlike other tokenized stock offerings that use synthetic derivatives, Galaxy’s approach involves real ownership. Investors who tokenize their shares keep full legal rights to the actual stock.
“It literally is our class A common stock,” explained Alex Thorn, Galaxy’s Head of Firmwide Research. The tokenized shares carry the same voting rights and economic claims as traditional shares.
The partnership uses Superstate as an SEC-registered transfer agent. This regulatory compliance approach sets Galaxy apart from previous tokenization efforts that operated in gray areas.
Galaxy’s move comes as the tokenized stock market reaches new heights. The total value of tokenized stocks hit $341 million, representing 380% growth since 2022.
Benefits and Limitations of Tokenized Trading
The tokenization offers several advantages for investors. Trading can happen 24/7 globally rather than during traditional market hours. Settlement happens almost instantly through blockchain technology.
However, current limitations exist. The SEC hasn’t approved Automated Market Makers for securities trading on blockchain. This means investors can only make peer-to-peer trades with other tokenized Galaxy stockholders.
They can’t yet buy and sell on demand through automated systems. Galaxy and Superstate are working with SEC regulators to address this limitation.
The companies believe their compliant approach will help speed regulatory approval. “We want to do what we can under the existing rules without skirting them,” Thorn said.
Regulatory Environment Shifts
The timing reflects changing regulatory attitudes toward digital assets. The Trump administration has taken a friendlier stance toward crypto innovation compared to previous policies.
SEC Chairman Paul Atkins, considered pro-crypto, directed staff in July to work with companies on tokenized securities distribution. He acknowledged new rules may be needed for emerging use cases.
Commissioner Hester Peirce has also voiced support for tokenization initiatives. This regulatory softening has encouraged companies to test new approaches.
Galaxy and Superstate worked directly with SEC staff before launching. They expressed confidence their tokenization complies with existing securities laws.
The companies see their initiative as a test case for broader industry adoption. “This is essentially what we view as a necessary first step,” said Superstate CEO Robert Leshner.
Other companies have explored similar territory. Robinhood launched U.S. stock tokens for European customers earlier this year. Crypto exchange Kraken introduced tokenized stock trading on Ethereum.
These previous efforts mostly used synthetic products rather than actual shares. Galaxy’s approach of tokenizing real stock ownership represents a different strategy.
Backed Finance’s xStocks platform has already tokenized over 60 companies including Netflix, Meta, and Nvidia. These tokens trade on various exchanges and decentralized platforms.
The broader tokenization trend extends beyond stocks. Private credit and U.S. Treasury bonds have seen the most activity. Real estate and money-market funds have also attracted tokenization interest.
Galaxy went public on the Toronto Stock Exchange in 2018. The company expanded to Nasdaq’s Global Select Market earlier this year.
The crypto investment firm now carries a market cap near $9 billion. Galaxy’s stock has performed well since joining Nasdaq earlier this year.
Industry observers expect more companies to follow Galaxy’s lead. The combination of improving technology and friendlier regulations creates opportunities for expansion.
