Why McDonalds, Microsoft and Google saying no to tokenized stocks isn't a dealbreaker

The SEC's new framework for tokenized stock trading looked, at first glance, roughly a month ago, like a fast track to putting U.S. equities on crypto rails.

The first real-world test hasn't looked particularly encouraging so far.

A growing group of public companies has objected to having their shares traded on the tokenized-securities venue being built by OKX and Intercontinental Exchange (ICE), the owner of the New York Stock Exchange.

This week’s of objections included some of the biggest names yet: Microsoft (MSFT), Alphabet (GOOG, GOOGL), Goldman Sachs (GS) McDonalds (MCD) and three others on Monday, then Wells Fargo (WFC) and Cisco (CSCO) and four more firms on Friday rejected having tokenized versions of their shares traded on OKXICE, bringing the disclosed total now to 22 objecting issuers.

Seeing some of the world's largest companies say no may not exactly be the start that tokenization advocates had hoped for.

But it also isn't necessarily a major blow to the SEC's experiment.

Why it matters

Before trading in a company's shares, a venue must notify the issuer and give the issuer 30 days to object. If the company stays silent, trading can begin.

That gives public companies a say in whether unaffiliated third parties tokenize and trade their shares, but it also tilts the decision toward caution.

Global law firm Latham & Watkins has warned issuers that silence effectively becomes an irrevocable decision: the SEC order provides no mechanism to object after the 30-day window or withdraw a prior non-objection once trading begins.

So when a legal or investor-relations team receives notice about a new market structure it may know little about, saying no while it figures things out can be the rational choice.

“Most of these companies had no idea a third party had tokenized their stock until the OKXICE notice went up,” Dave Hendricks, CEO and founder of tokenization firm Vertalo, told CoinDesk.

“Once they do, the questions come fast: who holds the shares behind the token, how do dividends and votes reach those holders, what does the transfer agent see?” he added.

If those questions can't be answered within 30 days, he said, objecting makes sense.

Olivia Vande Woude, head of tokenization at Ava Labs, also cautioned against reading the growing list as a verdict on OKXICE.

“It's the first venue to send notices under the SEC's Innovation Exemption, so it's the first to get the answers,” she said.

And because objecting costs nothing while silence counts as consent, she expects the list to keep growing.

“Given how easy the opt-out is, the list of objectors is likely to keep growing, and the next venue that sends notices should expect similar resistance,” Vande Woude said.

That may be less a sign that the experiment is failing than an indication of what the experiment is uncovering.

“This exemption is a data-gathering exercise,” Vande Woude said. “What it's showing is that public companies want a say in how their shares come onchain.”

What comes next

Nasdaq offers a useful example of what the objections do – and don't – mean.

The exchange operator has been a vocal supporter of tokenization and is pursuing its own model for tokenized securities. But Nasdaq Inc., whose shares trade under NDAQ, said it intends to object to having tokenized versions of its own stock traded on TSVs under the current exemption.

That reflects a disagreement over market structure, not tokenization itself.

Nasdaq warned that TSVs operating outside the National Market System (NMS) could fragment liquidity, weaken price discovery and lack safeguards such as real-time best-price display and consolidated-tape reporting. Its own model keeps tokenized securities inside the existing exchange framework.

There is also a simpler question for issuers: what's in it for them?

Reid Noch, vice president of U.S. equity market structure at TD Securities, told CoinDesk the bigger issue is that the upside for issuers remains difficult to quantify. Tokenization could bring additional demand for U.S. shares, particularly from overseas investors, but the SEC framework may not generate enough new demand to offset the risks of thin, 24/7 trading outside the familiar market structure.

That doesn't mean everyone is saying no.

Securitize (SECZ), which specializes in tokenized securities, told CoinDesk it does not plan to object to inclusion on the OKX-ICE venue. A representative of digital asset custodian BitGo (BTGO) also said in an email that the company won't object to the listing.

Both have an obvious interest in helping the tokenized-asset market grow, but Securitize's response also pointed to what may be needed for more traditional companies to get comfortable.

“There's an important education process underway,” CEO Carlos Domingo said.

The firm said it has been reaching out to issuers that are or may become involved with its own tokenized stocks, including through webinars explaining the different trading models, shareholder rights and potential trade-offs.

That probably offers the clearest glimpse of what comes next: Education and time.

The SEC may have removed one regulatory barrier to tokenized stock trading. Getting public companies comfortable enough to use it could take considerably longer.