Tokenized stocks risk replicating the 1960s “paperwork crisis” that strained Wall Street’s settlement system, according to Joris Delanoue, CEO of Fairmint, an on‑chain securities infrastructure provider.

In the late 1960s, rapid growth in stock trading overwhelmed a paper‑based system, leading to back‑office backlogs, missing certificates and settlement failures that forced the NYSE to close on Wednesdays in 1968; the episode spurred creation of centralized depositories and the Depository Trust Company.

The market for tokenized equities has expanded to roughly $2 billion, up from less than $500 million earlier this year, as investors seek round‑the‑clock exposure to U.S. stocks; demand is driven by global investors wanting ownership of firms such as the “Magnificent Seven” technology companies.

Delanoue warns that many tokenized‑stock offerings rely on special‑purpose vehicles, proprietary ledgers or exchange‑specific systems that can fragment shareholder registers, leaving investors dependent on intermediaries and creating uncertainty about voting, dividend and asset rights if those entities fail.

Fairmint records ownership on a blockchain ledger as an SEC‑registered transfer agent, asserting that its system provides a single authoritative register without mirror images, and has processed more than $1.6 billion of equity natively on‑chain since 2019.

He cautions that without industry‑wide interoperable standards, competing platforms may develop closed ecosystems, fragmenting the market and jeopardizing the credibility of tokenized equities; Fairmint has released its on‑chain securities standard as open source to encourage shared infrastructure.

The industry now faces a choice between building a distributed, common infrastructure or repeating the fragmentation that nearly broke Wall Street’s settlement machinery half a century ago.