Fairmint CEO warns tokenized stocks may repeat 1960s paper crisis

Wall Street almost drowned in paperwork once. In the late 1960s, daily trading volumes on the New York Stock Exchange surged from roughly 5 million shares to over 12 million, and the back-office infrastructure built for a quieter era simply collapsed under the weight. Settlement failures cascaded. Brokerages shuttered. It took the creation of the Depository Trust & Clearing Corporation to pull the industry back from the brink. Now, according to Fairmint CEO and co-founder Joris Delanoue, the fast-growing world of tokenized stocks is flirting with a remarkably similar disaster. The parallel Delanoue is drawing Delanoue’s argument boils down to a structural mismatch. The 1960s crisis wasn’t caused by too many people wanting to trade. It was caused by systems that couldn’t keep up with the people who wanted to trade. Manual clearing processes, physical stock certificates, and fragmented record-keeping turned a boom into a bottleneck. Today’s private equity markets, Delanoue contends, suffer from many of the same ailments: fragmentation, illiquidity, and heavy reliance on centralized intermediaries that weren’t designed for high-throughput digital transactions. The risk is that tok...