Galaxy Digital Discusses Tokenizing Shares With SEC Ahead Of Nasdaq Listing

Galaxy Digital is currently engaged in discussions with the U.S. Securities and Exchange Commission regarding the tokenization of its own shares and potentially other equities. This initiative aims to leverage Galaxy's in-house digital asset platform, enabling the company's stock to be utilized in decentralized finance applications such as trading and lending. In March, Galaxy held a meeting with the SEC’s crypto task force to explore the possibility of registering Galaxy’s stock on a blockchain.

Mike Novogratz, the CEO of Galaxy Digital, expressed confidence in the potential of tokenized networks, stating that tokenization feels "really close" to becoming a reality. This move comes as Galaxy prepares to begin trading on the Nasdaq, marking a significant milestone for the company, which managed $7 billion in assets at the end of March. Previously, Galaxy was only listed in Canada, and its Nasdaq debut is part of a broader trend of increased competition among crypto-native companies going public.

Tokenization involves representing traditional assets as digital tokens on blockchains, which can facilitate faster settlement, broader access, and continuous trading. Galaxy has already demonstrated the potential of this technology by tokenizing a 316-year-old Stradivarius violin to secure a loan, showcasing an early use case of the technology. The SEC has also shown growing interest in the space, recently hosting a tokenization roundtable where officials drew parallels between the shift to digitized assets and past transitions in media formats.

However, the tokenization of equities still requires regulatory frameworks that can reconcile blockchain technology with current securities laws. Other firms, including Coinbase and Kraken, have also explored similar ideas around tokenized securities. Novogratz emphasized that Friday’s listing marks a new chapter for Galaxy, stating, “We are going to ring the bell… it’s the beginning and not the finish.”