Fairmint CEO: Tokenized stocks may recreate the "paper crisis" on Wall Street in the 1960s

According to CoinDesk, Fairmint CEO Joris Delanoue stated that the boom in tokenized stocks may replicate a digital version of Wall Street's "paper crisis" from the late 1960s. At that time, trading volume in U.S. stocks surged, overwhelming the back office that relied on paper stock certificates, leading to an increase in settlement failures. The New York Stock Exchange even closed on Wednesdays to clear the backlog, ultimately driving infrastructure reforms such as central depositories and custodial trust companies.

Delanoue mentioned that the main issue is whether the crisis is being recreated in a digital manner. Exchanges, special purpose vehicles (SPVs), token packaging, and proprietary ledgers may sever ownership records during the growth of tokenized stocks. Some products only provide economic exposure to the underlying stocks rather than legal ownership, and investors may rely on intermediaries, facing uncertainties regarding voting rights, dividends, and asset claims when issuers or SPVs encounter problems. The global market for tokenized stocks has grown from less than $500 million at the end of the first quarter to approximately $2 billion.