Six Ways to Hold Stocks: Ownership Differences from Paper Certificates to On-Chain Tokens

From paper certificates to on-chain tokens, six ways of holding, six boundaries of rights.

Written by: @steinRWA

Compiled by: AididiaoJP, Foresight News

Everyone knows how to buy stocks, and some know what rights come with them. But most investors have never asked: whose name is actually on the company's shareholder register?

Public companies have an official list of shareholders, called a register, maintained by a transfer agent. Who is recognized as a shareholder by the company, who receives dividends, who votes, and who gets paid when the company has issues, all ultimately depend on this list.

There are six common ways to hold stocks, from paper certificates to stock tokens in a crypto wallet. They may look different, but they all boil down to one thing: how far your name is from the transfer agent's register.

A List That Determines How Many People Are Between You and the Company

Paper certificates are the closest to "being on the list." The company sends dividends and reports directly to you, with no one in between, and brokers cannot lend out your stocks.

The problem is that it is slow and expensive. Selling requires mailing the certificate back; if lost, a replacement requires an affidavit and compensation guarantee, usually costing 2%-3% of the stock's market value. Continental Stock Transfer charges 3% for U.S. holders and 5% for others. A $50,000 certificate could cost $1,500-$2,500 to replace.

DRS: The Paper Is Gone, but the Name Remains

DRS replaces paper with electronic entries, and the name is still on the transfer agent's register. There are no certificates to lose, and it is usually free, with dividends and voting documents sent directly by the company’s agent.

It is not a broker account: you cannot place limit orders, cannot pledge stocks, and selling often requires bulk selling or transferring to a broker first.

Computershare maintains registers for 58% of S&P 500 companies, with about 35 million shareholder accounts; Equiniti has about 20 million. GameStop retail investors made it famous: in March 2023, about 76 million shares, accounting for a quarter of the company's stock, were held in this way.

DSPP: Bypassing Brokers, Often Cannot Avoid Nominee Holders

DSPP allows you to bypass brokers and buy stocks directly from the company plan. IBM, Union Pacific, and Texas Instruments all offer this through Computershare.

The threshold is not high: Union Pacific starts at $250, IBM at $500, and you can add $50 each time, with dividends automatically reinvested, even buying fractional shares.

But many DSPP stocks do not list your name. Union Pacific's plan states that Computershare will hold all stocks bought or deposited by participants in the name of the nominee holder. The plan knows who you are, but the register lists the nominee holder.

You can transfer plan shares into your name, which then becomes DRS. Otherwise, you bypassed the broker but not the intermediary.

Fees also vary. Union Pacific's purchase fees are borne by the company, while selling incurs a $15 fee plus $0.12 per share; cash must be invested in batches at least weekly, and you cannot control the transaction price. IBM charges $5 for each check investment and $1 for automatic deductions.

The on-chain version aims to retain the benefits of "buying directly from the company" while removing the worst parts. Superstate's Direct Issuance Programs will be announced on December 10, 2025, allowing public companies to sell new tokenized shares directly to verified investors. Investors pay with stablecoins, and shares are instantly credited to wallets; there are no underwriters, and companies follow the standard S-3 shelf registration. It runs on Ethereum and Solana, with the first issuance expected in 2026.

Securitize conducted an early version in 2021: wallet provider Exodus raised about $75 million directly from individual investors through Regulation A, with Securitize acting as the blockchain transfer agent. Equiniti provides the Shareholder Central portal for Bullish, allowing registered holders to switch between regular book shares and tokens.

Unlike traditional DSPPs, these on-chain versions place shares in your name, not in the name of the plan's nominee holder. Most investors endure intermediary issues daily but may not realize it.

Broker Nominee Holding: Easiest to Buy and Sell, But Not Your Name on the Register

When buying stocks through Robinhood, Fidelity, Schwab, or almost any broker, your name is not on the register; instead, it is Cede & Co.------the nominee holder of DTC. DTC holds stocks for almost all U.S. brokers. In 2023, about 75% of GameStop's shares were under Cede & Co.

Brokers have another account that records which stocks are yours. Legally, you hold a "security interest" in the broker, not a direct position on the company's shareholder register. This is what broker nominee holding is.

It is popular for a reason: trades complete in seconds, you can place limit orders, you can finance, and sales settle the next day; in case of broker bankruptcy, SIPC covers up to $500,000.

Convenience comes at a cost. Stocks bought on margin can be lent to short sellers by the broker; during the lending period, you may lose voting rights, dividends may turn into substitute cash, and tax treatment is different. Fully paid stocks will only be lent out if you join the lending program.

Fidelity's fully paid lending program charges daily, but during the lending period, you have no voting rights, receive substitute cash instead of dividends, and lent stocks are not protected by SIPC; protection comes from collateral placed by the borrower in the custodian bank.

Wrapped Tokens: Prices Like Stocks, Legally Promises

Most tokenized stocks are not stocks but synthetic tokens. Third parties buy real stocks, hand them to custodians, and then issue a token that tracks the price. The tokens feel like stocks, but legally they are the issuer's promise to you.

xStocks trades on Kraken and Solana, issued by Backed Assets (JE) Limited from Jersey, legally classified as "tracking certificates," which are unregistered debt instruments. They are backed one-to-one by real stocks, and in case of issuer bankruptcy, an independent agent can seize the stocks, but there are no voting rights, and the tracked company does not know you exist.

Robinhood's Stock Tokens are similar, issued as tokenized debt securities from Jersey. Ondo gives you stock prices plus dividends reinvested but does not grant ownership.

Counting the layers of intermediaries makes it clear: the register shows Cede & Co., behind it are custodians or brokers, further back is the synthetic token issuer, and finally, there is you, holding a debt claim against the issuer.

Debt notes and tracking certificates are both promises, not shares; your safety depends on the collateral and legal structure behind them.

SEC staff refer to these as "synthetic tokenized securities," dividing them into securities-linked and securities-based swaps; the latter do not grant rights such as equity, voting, or information, and ordinary U.S. investors are still restricted. Ondo's structure is described as bankruptcy isolation, with some stocks able to transmit voting preferences through Broadridge, but by default, no voting rights are granted.

Synthetic tokens are popular because they allow trading any stock without asking the company, can be traded 24/7, and can be directly used for DeFi collateral. The tokenized stock market, valued at $4.64 billion, is mostly made up of these products.

IST: Moving the Register on-Chain

IST is another route: companies allow transfer agents to place part of the register on-chain. Tokens move from one wallet to another, and the shares on the register move with them.

SEC staff say that the form does not affect the applicability of federal securities laws------shares are still shares. This is the only tokenized form designed to make you a registered shareholder. Computershare states that IST holders are "registered shareholders, enjoying the same rights as other registered holders," equivalent to DRS plus superpowers.

The superpowers are real. Approved wallets can transfer at any time; Galaxy Digital's shareholder list updates instantly when tokens change hands; Forward Industries' tokenized stocks can be collateralized for stablecoins on Kamino; Galaxy also puts 2026 shareholder voting records on-chain.

Not many companies are doing this: Galaxy, SharpLink, Forward Industries through Superstate; Bullish through Equiniti; Exodus and Securitize themselves through Securitize; and now Canton Strategic Holdings through Fairmint.

Fairmint's subsidiary Fairmint TA LLC is an SEC-registered transfer agent (file number 084-06901). On October 28, 2026, it will launch services to move the main shareholder register of companies to the Canton Network, recording issuance, transfer, and cancellation through the Open Cap Table Protocol. The first company to disclose is Nasdaq-listed Canton Strategic Holdings (CNTN), whose tokenized stocks are expected to trade on TSV starting November 2, 2026, with rights equivalent to shares bought on Nasdaq.

The benefits of an on-chain register go beyond instant updates and never closing. Shares can be self-staked, company actions can be automated, transfer rules can be written into smart contracts, and issuers can receive funds faster.

Classic registers update in bulk; Galaxy's tokenized shares are recorded on Solana by Superstate, and when tokens move, the registered shareholder list updates in real-time. Only the tokenized portion is on-chain, while the Galaxy shares held by brokers remain in the regular electronic register.

You can borrow against your own shares or choose to pledge them yourself. Forward Industries' tokenized shares can be stored in Kamino for stablecoin loan collateral, which is not easily accessible for regular DRS holders due to the lack of brokers or margin accounts. The trade-off is that the tokens are locked in the lending protocol during the deposit period, and if the loan goes bad, they may be liquidated.

The most important point is: you must safeguard your wallet's private key, as the transfer agent retains off-chain documents linking the wallet to your real name.

Superstate and Securitize: Two Approaches to IST

Superstate was founded by Robert Leshner, who is also the founder of Compound; its Opening Bell platform directly puts SEC-registered shares on-chain, rather than creating synthetic or wrapped versions. Existing shareholders open Superstate accounts to transfer shares from brokers to approved wallets.

The largest case is Forward Industries: on-chain shares increased from $9.8 million at the end of December 2025 to $56.8 million by the end of September 2026, nearly a sixfold increase; non-U.S. holders have been able to use it as loan collateral in Kamino from the start, priced by Pyth. Galaxy has only a small portion of its shares on-chain.

Securitize has been in this business the longest. In 2021, it served as the transfer agent for Exodus's $75 million direct blockchain issuance. In April 2026, the world's largest transfer agent, Computershare, chose it, allowing Computershare's clients to issue IST as well. In June, Continental Stock Transfer listed it as a preferred tokenization partner. On July 2, Securitize went public on the NYSE, tokenizing its own stock on the first day.

Its business mainly involves funds: as of the end of June 2026, approximately $4.3 billion in tokenized assets, rising to about $5 billion in July, managed by firms like BlackRock, Apollo, and KKR. Trading volume grew 147% to $5.3 billion in the second quarter, with revenues of $14.4 million and a net loss of $21.7 million.

Exodus's 2021 issuance was also handled by Securitize as the transfer agent, with only tokenized share holders appearing in its records. Through the partnership with Computershare, other companies can also add this option, while the register is still maintained by Computershare.

CET: On-Chain Version of Broker-Managed Shares with Conversion Options

IST requires approval from each company, which slows down the process. Securitize built a bridge. In October 2026, it launched Securitize Stocks, tokenizing 12 U.S. stocks, including Apple, Microsoft, Nvidia, Alphabet, Tesla, Meta, Amazon, Netflix, Circle, MicroStrategy, and Palantir. These are called Convertible Equity Tokens (CET).

CET is the "on-chain version of broker-managed shares": you hold securities rights through Securitize's brokers, backed by real shares one-to-one, with Securitize promising not to lend them out. However, you are not a shareholder on the company register. "Unless converted, holders are not registered shareholders of the underlying issuer."

They trade on Solana, settled in USDC, with Jump Trading as the market maker, starting with extended trading hours and planning for 24/7; Securitize Markets sells in the U.S., while Securitize Europe sells in the EU; holders retain dividends and voting rights categories. In the future, they can use it as collateral in lending markets like Aave.

"Conversion" is the bridge: if the company adopts IST in the future, CET holders can convert to actual registered shares without selling. Securitize can list any stock today and upgrade holders one by one.

SECZ: Same Stocks, Different Purchase Methods and Names on the Register

On July 2, Securitize went public on the NYSE and simultaneously put its own stock on-chain. If you buy tokenized SECZ through KYC, who is on the register? The answer depends on the purchase method.

If you buy through a regular broker on the NYSE, the register shows the broker as the holder, and you are the beneficial owner. If you buy tokenized SECZ on the Securitize platform, the evidence points to direct ownership: Securitize's own S-1 states that it maintains "appropriate ownership records" as a transfer agent, reconciling tokenized shares with the remaining shares "through the same control book and master security holder documents."

Most SECZ are traded on the NYSE through regular brokers, still under Cede & Co.'s broker holding, and Securitize can only see these holders through the broker list like any other company; it only directly knows the investors holding tokenized SECZ on its platform.

Dividends: The Closer to the Register, the More Direct the Money

Among the six methods, the transfer agent is always the custodian of the list. Only two things change: it writes down whose name is on the register and what it does for you.

First, let's look at dividends. Holders of certificates, DRS, and IST receive money directly. DSPP members can automatically reinvest dividends. Holders under broker management must receive through the broker, which may take longer; if the stock has been lent out, what they receive is not dividends but cash in lieu.

Fidelity adds an additional 26.98% credit on the qualified dividend portion in taxable accounts to offset the tax differences caused by cash in lieu. Holders of wrapped tokens receive reinvested dividends: xStocks directly adjusts balances, while Ondo deducts taxes before reinvesting.

Fees and Lending: Convenience Comes at a Price

• Fees: Replacing lost certificates costs 2%-5% of the stock's market value; DRS is usually free; DSPP charges a small fee for buying or selling; the minting and trading costs of wrapped tokens vary by platform and are not disclosed in legal documents.
• Lending income: Only holders under broker management can earn this money, provided they join a fully paid lending program. Stocks bought on margin may be lent out by brokers, and you may not receive any money; once stocks are lent out, they are no longer protected by SIPC.
• Borrowing capacity: Stocks held under broker management can be used for margin loans; IST holders can borrow against their tokens in DeFi, as Forward's shareholders do in Kamino; wrapped tokens are the most widely used and are mainstream collateral in DeFi, but what you pledge is merely a promise on paper.

Before Buying, Ask These Five Questions

Regardless of the holding method, five questions can reveal what you truly own:

• Who's name is on the register? Yours, the nominal holder's, or Cede & Co.'s?
• Legally, what do you hold? The shares themselves, securities rights against the broker, or the promise of the synthetic token issuer?
• Can others lend your stocks? Only brokers can, and usually limited to margin purchases or if you actively join the lending program.
• Do dividends and voting rights belong to you? Registered holders usually have them; synthetic token holders typically do not have voting rights.
• If the intermediary fails, what protects you? SIPC, segregated collateral, or nothing at all?

Conclusion: Back to the Oldest Question

From paper certificates to on-chain tokens, we have come full circle, returning to the same question. Paper certificates write your name on the register at the cost of being slow; brokers speed up transactions at the cost of your name disappearing from the register; wrapped tokens allow you to buy and sell globally at any time, but leave you with only a promise on paper. IST is the first solution aiming to provide everything at once: your name on the register, with the speed of internet transactions.

These products are still small in scale. But the next time you buy stocks, whether on-chain or off-chain, it's worth asking the oldest question in the investment world: whose name is written on the register?