Cantor Fitzgerald Partners With Securitize for Blockchain IPOs

Wall Street firm Cantor Fitzgerald announced a partnership with Securitize on Wednesday to facilitate the issuance of stock on the blockchain for companies undergoing initial public offerings (IPOs). This collaboration aims to advance the development of a U.S. equities market where shares are tokenized, enabling 24/7 trading with instant clearing and settlement.

Securitize specializes in creating blockchain-native shares that are designed to align closely with traditional securities from a regulatory standpoint. This approach differs from the "wrapper model" employed by firms like Robinhood and Kraken, which involves purchasing blocks of stock to hold in a special purpose vehicle and then issuing synthetic tokens tied to the shares' value. The wrapper model has faced controversy as it often issues tokenized versions of popular stocks without direct company involvement.

In contrast, Securitize's blockchain-native model ensures direct company participation and control over the tokenized shares they issue. Cantor Fitzgerald's choice to partner with Securitize is significant, as most tokenized share trading to date has utilized the wrapper model, particularly for investors in markets like Brazil and South Africa seeking exposure to U.S. stocks. Trading of natively issued blockchain stocks has been less common, with only a few companies, including Galaxy, Figure, and Securitize itself, having pursued this route.

Ben Boehmke, Head of Strategies for Equities at Cantor, stated that the firm selected Securitize due to its native blockchain model. This partnership is expected to boost the nascent market for tokenized shares, potentially paving the way for more traditional financial institutions to explore blockchain-based offerings.