Crypto’s tokenized-stock boom risks creating a digital version of the “paper crisis” that brought Wall Street’s settlement machinery close to breaking point more than half a century ago, according to Joris Delanoue, CEO of onchain securities infrastructure provider Fairmint.
In the late 1960s, booming U.S. stock trading overwhelmed a market reliant on clerks processing paper share certificates. Back offices fell behind, securities went missing and settlement failures piled up. The New York Stock Exchange even closed on Wednesdays for part of 1968 to let firms catch up.
The crisis helped drive a redesign of U.S. post-trade infrastructure, including centralized securities depositories and the formation of the Depository Trust Company.
“The main question today is whether we are recreating the paper crisis, but as a digital crisis,” Delanoue told CoinDesk in an interview.
The danger, he said, is that exchanges, special-purpose vehicles (SPVs), token wrappers and proprietary ledgers could fragment ownership records as tokenized stocks grow.
“A token is not equity, but equity can be a token,” Delanoue said. “When equity is a token, this token has the same safeguards, guarantees and trust as you had in the previous system.”
