Jay Clayton, the chairman of the U.S. Securities Exchange Commission (SEC), just sent a major shockwave across financial markets.
During a public webinar last week, Clayton talked about the future of the stock market. In the middle of his talk, he said, “It may be very well the case that those [stocks] all become tokenized.”
If you weren’t paying close attention, it was easy to miss.
But it’s an incredible statement coming from the head of the SEC.
For investors, Clayton oversees the most important regulatory agency in the world. He’s on the front lines when it comes to making the rules for companies and investors.
And based on his recent comments, he’s surprisingly open-minded about tokenization.
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Tokenization refers to creating a digital representation of an asset. Much like a stock, tokens can give you ownership in a company or asset.
As I’ve mentioned before, tokenization is one of the biggest trends to hit investing in years. Its transparency and efficiency make it a cheaper, easier way to exchange assets and raise capital. And it could cause a seismic shift on Wall Street, where big banks charge massive fees for helping companies to go public. They also rake in profits by charging investors for access to investment deals.
Tokenization will help companies and investors avoid Wall Street’s fees… and it will also open up new opportunities for investors. For example, they’ll likely get easier access to early-stage companies with bigger growth potential (rather than having to wait for a company to go public via an IPO).
Small companies are also likely to benefit from tokenization. It will give them easier access to the capital they need in order to grow.
Put simply: Tokenization will help knock down the expensive walls created by Wall Street over many decades.
And Jay Clayton is one of the people who could help pave the way for change.
During last week’s webinar, he noted how technology changes over time. He pointed out that stocks already trade 100% electronically, compared to years ago when investors had to physically trade the stock certificates of different companies.
To reiterate, the process of tokenizing an asset or business is a faster, cheaper, and more efficient way of raising capital than the typical high-fee Wall Street way.
Here at Curzio Research, founder and CEO Frank Curzio raised capital through the Curzio Equity Owners (CEO) token. It recently paid its first dividend to investors… and could be available for public trading as soon as next week. (Stay tuned for details.)
And he doesn’t just see tokenization affecting stocks. He said he’s also open to the idea of tokenizing exchange traded funds (ETFs).
You’re probably familiar with ETFs already. These investment vehicles are like mutual funds in that they hold several investments. But unlike mutual funds, ETFs trade continuously throughout the day, just like a stock.
Jay Clayton’s comments are a sign that changes are coming sooner than most people realize…
Keep in mind, we’re still in the early stages of the shift toward tokenization. Cryptocurrencies made big headlines in recent years. But the bigger opportunity will come from applying digital technology to “traditional” investments, like stocks and bonds.
The fact that John Clayton of the SEC is open to tokenization will lead to major developments in the tokenization ecosystem…
As tokenizing gains momentum, mom and pop investors will have the opportunity to invest in all kinds of businesses in their early growth years.
Pay attention: We’re witnessing a paradigm shift in the capital markets.
P.S. Frank believes STO technology is so disruptive, thousands of stocks could disappear from the NYSE altogether…
But STOs also present incredible opportunities for accredited investors.
Join Frank as he presents “Will This New Asset Class be the End of the New York Stock Exchange” at the MoneyShow on October 15, 2:10 p.m. (EDT). Accredited investors can register for this free virtual event here.