Formation Securities targets 2027 launch for Solana tokenized stock venue

Formation Securities is planning a tokenizedTokenizationRecording ownership of a traditional asset — a bond, a fund share or a property — as a token on a blockchain. It promises faster settlement and round-the-clock trading.Full explanation in the glossary → securities venue on Solana for an early 2027 launch, after notifying the US Securities and Exchange Commission of its intent to operate under the agency’s temporary Innovation Exemption.

The initial securities list is expected to include tokenized shares linked to Galaxy Digital, Exodus Movement and Forward Industries. The company is licensing technology from decentralized exchange Orca and intends to build the venue in cooperation with public companies.

The proposed structure would allow verified investors to trade eligible US-listed stocks around the clock. That is a meaningful departure from the timetable of conventional US equity markets, though the exemption creates a framework rather than removing the operational burden of running a securities marketplace.

Formation’s proposed market would use an automated market maker to match liquidityLiquidityHow fast you can buy or sell without moving the price much. Critical for traders.Full explanation in the glossary →, with investors holding tokenized securities in their own wallets and settling transactions onchain against stablecoinsStablecoinA cryptocurrency pegged to a stable asset, usually the US dollar (USDT, USDC). Used to move money between exchanges and to park funds without leaving crypto.Full explanation in the glossary → and other eligible assets.

The tokens are intended to retain voting rights, dividendDividendThe part of profit a company pays out to shareholders in cash, usually quarterly or yearly. It is not guaranteed — the board can cut it.Full explanation in the glossary → rights and other shareholder entitlements. Traditional transfer agents would still maintain the official shareholder ledger, leaving the issuer’s formal relationship with its owners outside the blockchainBlockchainA shared ledger copied across many computers, where records are chained together and practically cannot be altered afterwards. The technology behind bitcoin and other cryptocurrencies.Full explanation in the glossary → settlement layer.

Superstate and Securitize are expected to make tokenized shares available on the marketplace. The division of roles is important: tokenization may change how a position moves between investors, but it does not by itself replace the recordkeeping functions underpinning public-company ownership.

Formation’s emphasis on working with issuers sets it apart from the proposed OKX–ICE initiative, where tokenization has triggered a visible corporate backlash. More than 50 companies had objected by early November to having their shares tokenized on that proposed venue.

Under the Innovation Exemption, a marketplace seeking to trade stock tokenized by an unaffiliated third party must notify the issuer in writing and then wait at least 30 calendar days. The issuer can use that period to object.

That rule does not guarantee participation, but it gives companies a formal point of control that is central to the emerging dispute. An issuer-aligned launch may face fewer consent conflicts; it may also limit the breadth of securities available if companies choose not to participate.

A 24/7 tokenized market still has to demonstrate that it can support dependable execution. The key question is whether trading activity and available liquidity will be sufficient to keep prices orderly when the underlying listed shares trade on a different schedule.

Nasdaq has warned that tokenized stock trading could bring unintended consequences for liquidity, price discovery and long-term shareholder value. Those concerns are not resolved merely by using an automated market maker, which can provide a trading mechanism but does not ensure deep pools of capital or narrow pricing differences.

The challenge is particularly acute for a venue starting with a limited selection of cryptoCryptocurrencyDigital money that lives on a blockchain instead of a bank’s ledger. Its price is set purely by supply and demand, so it swings far more than shares.Full explanation in the glossary →-related public companies. Fragmenting activity across conventional exchanges and tokenized venues could broaden access, but it could also complicate the formation of a single reliable market price.

Solana already hosts roughly $575 million of tokenized stock value, behind EthereumEthereumThe second-largest crypto network and its currency, ether (ETH). Unlike bitcoin it runs smart contracts, so stablecoins, DeFi and tokens are built on it.Full explanation in the glossary → at about $747 million and BNB Chain at approximately $1.7 billion. Formation’s proposal would add a regulated-market use case to that existing base rather than create a tokenized-equity market from scratch.

At the time of writing, SOL traded at $86.43, up 0.22% in the delayed quote. The modest move offers little evidence of a direct market response to a venue that remains a 2027 plan.

The nearer milestones are procedural and practical: issuer engagement, the availability of tokenized shares, verified-investor onboarding, and proof that onchain settlement can coexist with sound securities-market safeguards. The exemption offers a route to test the model; it does not settle the questions that issuers and market operators have raised.