Social Capital CEO: From U.S. Stocks to SpaceX, How Does Equity Tokenization Reshape the Capital Markets?

Original link: https://x.com/chamath/status/2029650649819009211

Original author: Chamath Palihapitiya

Translation: Ken, Chaincathcer

Modern stock markets are built on infrastructure that existed long before the digital network era.

The global stock market capitalization exceeds $150 trillion, yet trading hours remain limited, settlement still relies on multiple layers of intermediaries, and many high-growth company investment opportunities are still restricted to a select few investors.

These structural limitations restrict the flow of capital, the range of participants, and the speed of ownership changes.

Market infrastructure providers are exploring how tokenization can modernize systems. Institutions like the New York Stock Exchange, Nasdaq, and DTCC have begun developing tokenized equity and settlement infrastructure.

As equity tokenization adoption increases, these barriers are gradually being removed.

Since early 2025, the market cap of equity tokens has grown nearly 3.5 times, reflecting a broader shift toward tokenizing real-world assets.

This expansion coincides with the rise of stablecoins. These tokens, pegged to fiat currencies, have grown over tenfold in less than five years and now serve as the primary settlement layer for on-chain financial activities:

While stablecoins serve different functions than equity tokens, their rapid adoption indicates that when tokenized financial instruments can offer clear infrastructure advantages, they can achieve significant scale.

Equity tokens represent the next challenge: can tokenization extend beyond payments to ownership of financial assets?

What are equity tokens?

Equity tokens are not just traditional stocks stored on the blockchain.

Traditional stocks represent ownership in a company.

Equity tokens are blockchain-based assets that represent shares in a company or structured rights related to those shares, with ownership tracked and transferred via distributed ledger technology (DLT).

Tokenized equity can address three major market gaps 24/7

2. Around-the-clock trading: Markets are shifting from a five-day (or shorter) trading schedule to 24/7 continuous trading.

Even today, about 11% of U.S. stock trading occurs outside regular trading hours.

An around-the-clock market structure can incorporate new information into prices more quickly after hours and better accommodate a global shareholder base, with foreign investors holding about 15% of U.S. stocks.

3. Ownership: In traditional finance, ownership records are maintained across multiple intermediaries, including brokers, clearinghouses, and central securities depositories.

Tokenization reduces reliance on these layers and allows ownership to be directly tracked on shared ledgers.

This transforms ownership from static records into programmable financial assets.

Owners can use assets as collateral for on-chain loans, obtain credit guarantees, or deposit them into automated liquidity pools to generate yields.

In traditional markets, similar operations typically require multiple intermediaries and additional settlement steps. Each intermediary interaction incurs broker fees and commissions, ultimately passed on to equity holders.

Even with minor reductions in post-trade friction, estimates suggest annual savings of $5 billion to $10 billion for the stock industry.

4. Access restrictions: While the first two advantages mainly apply to public market stocks, tokenization also addresses access limitations in private markets.

Under current securities regulations, many private placements are limited to accredited investors, who typically must have a net worth of $1 million (excluding primary residence), an annual income of $200,000, or $300,000 combined with a spouse.

Private companies also need to limit the number of shareholders to remain unlisted. U.S. regulations require reporting to the SEC once a company exceeds 2,000 shareholders or 500 non-accredited investors.

Additionally, institutional venture capital funds often require limited partners to commit millions of dollars.

As a result, most investors have little opportunity to access high-growth private companies before they go public.

Equity tokenization aims to bridge this access gap.

Equity tokens can be issued through various structural models, but the most common approach currently relies on special purpose vehicles (SPVs).

In this structure, the SPV holds the underlying shares, and the tokens represent economic claims on that entity. This allows issuers to give investors exposure to private company investments that were previously limited to venture capital firms and institutional investors.

For example, Robinhood recently announced the promotion of tokens representing OpenAI and SpaceX to eligible EU users.

These tokens give investors exposure to two of the hottest private companies globally. However, they do not represent direct ownership of OpenAI or SpaceX shares. Instead, these tokens are linked to financial rights through intermediaries.

This highlights a core challenge of equity tokenization: the rights represented by tokens are not always standardized.

Different issuers can design tokens with materially different economic rights. For instance, Robinhood’s SpaceX tokens may or may not offer preferred stock rights, and if SpaceX eventually goes public, whether these tokens can be converted into common shares remains unclear.

Preferred and common shares differ in liquidation priority, voting rights, and return features. Without clear terms, investors find it difficult to price or compare tokens linked to the same company.

Therefore, many tokenized private equity products offer economic exposure rather than direct ownership. Since tokens exist at different legal levels from the underlying stock, investors must understand their structure before assuming ownership.

Despite these structural ambiguities, demand for private market access continues to grow. In this broader context, companies are staying private longer.

Surveys show that about 90% of Americans are willing to allocate part of their retirement savings to private assets, with Generation Z and millennial investors showing particular interest.

Equity tokenization is poised to bring more opportunities to access private markets, enhance liquidity, and create new ways to build financial ownership.