The Name Is on the Token. Where Are the Rights?

The 30-second version

A familiar name on a token does not tell you what you own. The token's name and technology can't answer what rights you hold — the legal relationship behind it, and the documents that set it out, do.

1 · Three cards

Picture three cards on a table. (This is an illustration for comparing three arrangements, not a list of products you can buy today.)

The first says "SoFi Bank deposit." The second says "HSBC Hong Kong dollar stablecoin." The third says "Microsoft stock."

All three are tokens. All three carry names you know: an American bank, Hong Kong's largest bank, one of the most famous companies in the world.

So here is the question: if something goes wrong, who owes you what?

Let's look at the first two. We'll come back to the third.

2 · The token doesn't tell you

A common line about tokenization goes: "Put an asset on a blockchain, and you own it directly."

The Bank for International Settlements looked at this question inside a cross-border payments prototype. In April 2024, the BIS and the Institute of International Finance launched Project Agorá, bringing together seven central banks and more than 40 financial institutions to settle tokenized bank deposits and tokenized central bank reserves on a shared platform. (Report, pp. 1, 8)

About the tokenized reserves and deposits in that prototype, the report is blunt:

> "Neither tokenised reserves nor tokenised deposits themselves confer any legal or economic rights on any holder; such rights arise, in all instances, from the underlying debtor-creditor relationship between the issuing bank and its account holder." (pp. 59–60)

Its headline finding: tokenisation "does not fundamentally alter the legal nature of money." (p. 4) A BIS explainer video released October 23 puts it more simply: "tokenization does not alter the legal nature of money and settlement." (02:31)

That is a finding about Agorá's design, not a ruling on every token. But it offers a useful habit. A token is a bit like an IOU slip: the slip alone won't tell you whom you can hold to account. For that, ask three questions:

Who owes me? What do they owe? Where is it written?

3 · Card one: one tap, and what you hold changes

On October 22, SoFi Bank launched SoFi Earn (SOFIE), a tokenized deposit. Each SOFIE represents $1 on deposit at SoFi Bank, paying a variable 4.40% APY as of October 20, with FDIC insurance up to the standard $250,000 limit per depositor, per insured bank, per ownership category. (Note #006)

It can pay interest because it is a deposit. The GENIUS Act bars stablecoin issuers from paying holders interest or yield solely for holding, using or retaining a stablecoin (generally applicable from January 18, 2027). The OCC's final rule of October 21 says that ban does not apply to deposits — tokenized ones included. (p. 99; Notes #005, #006)

The interesting part is the conversion. SOFIE converts 1:1 into SoFiUSD, SoFi's own stablecoin. Operationally, it's one conversion. Legally, it's two steps: the deposit is redeemed, and the stablecoin is separately issued, acquired or credited. Once the redemption posts on the bank's books, that money is no longer a deposit and no longer FDIC-insured. (Account agreement, pp. 18–19) The agreement requires SoFi to disclose this before you authorize the conversion.

Same bank. Same "one dollar." Before: an insured deposit. After: a different product, with different rights and protections.

First turn: did what you hold change? The name didn't. The bank didn't. Your rights and protections did. When the BIS says tokenization doesn't change the legal nature of money, it means the same money recorded a new way. SoFi's conversion turns it into a different product.

4 · Card two: getting it back is not the same as earning on it

On October 23, HSBC launched RedCoin, a Hong Kong dollar stablecoin. More than 3.3 million PayMe users can activate a wallet to pay friends and more than 100,000 merchants. (Note #007)

A core right behind this card is redemption at par, on stated conditions. The HKMA requires licensees to redeem at par value, generally processing valid requests within one business day; reserves must at all times be at least equal to coins outstanding and kept separate from the issuer's own assets. (Guideline, paras 2.2.1, 2.5.1, 3.3.1, 3.3.3)

What the relationship doesn't include is interest. A licensee "must not pay, or permit to be paid, any interest," and the HKMA extends that to "interest-like incentive in any form." (para 2.6.1) HSBC separately plans to let customers use RedCoin to subscribe to a not-yet-launched tokenized share class of a money market fund — a different investment, with its own terms and risks.

Same bank name, two different promises: one about getting your money back, another about investment returns.

5 · Card three: someone else can say no

Now, back to the card that says "Microsoft."

In the OKXICE notices we compared, Microsoft first appears on the objection list dated October 19. (It was not on the October 15 list.)

OKXICE is a planned venue for trading tokenized U.S. stocks; it has not launched. Microsoft's objection adds a layer to the question: who you get stock-related rights from, and whether the company is willing to have its stock traded on that venue, are two separate things.

Start with the first. According to OKXICE's October 23 notice, when a token is created by a "Tokenizer" unaffiliated with the issuer, the Tokenizer — acting through an SEC-registered broker-dealer — holds the underlying stock one-for-one. "Each token represents a security entitlement to one share of the underlying NMS stock," and onchain records are reconciled with the Tokenizer's books. (p. 5)

So your holding runs through the Tokenizer and its broker-dealer. Exactly what you can claim, and from whom, depends on the account, custody and token terms.

The SEC's September 17 order requires such tokens to give holders "the same rights and privileges as does traditional NMS stock of an equivalent class" — the same dividends, voting rights and share of residual assets. (Release No. 34-106402, II.E, p. 23) Under OKXICE's notice, distributions, proxy materials and corporate actions are carried out through the Tokenizer's pass-through arrangements. (p. 6) Those rights reach you through a middle layer.

Now the second. This piece concerns third-party tokenization; the notice also allows tokenization by or on behalf of the issuer. For the third-party model, the SEC built in a specific mechanism. The venue must first notify the company in writing. If the company objects in writing within 30 calendar days of receiving that notice, the venue cannot offer that token under the exemption. (II.D, pp. 21–22) The SEC's own examples of what a company might weigh: the risk of maintaining its shareholder register for onchain transfers, or prices in a liquidity pool drifting from the underlying stock. (p. 22) Those are the SEC's examples, not any company's stated reasons.

Companies used it. The objection list grew from 9 on October 15 to 16 on October 19 to 22 on October 23 (p. 7), with no one dropping off.

Second turn: who else gets a say? You might think this is between you and whoever sells you the token. But on this venue, under this mechanism, the company behind the stock has 30 days to say no — and 22 have. The notices give no reasons, so this shouldn't be read as opposition to tokenization. What it shows is structure: in third-party tokenization, the company isn't a party to the relationship between you and the Tokenizer, and the SEC carved out a defined place for it.

The question that matters most is still open: if the Tokenizer or its broker-dealer fails, how are holders' rights enforced, and where do they rank in insolvency? Neither the notice nor the order fully answers that, and this piece doesn't go that far.

6 · Coda: the examiners' checklist is changing too

The same week, the SEC's Division of Examinations published its fiscal 2027 priorities. Side by side with the prior two years: the fiscal 2025 report had a standalone "Crypto Assets" section; in the fiscal 2026 report, our full-text search found neither "crypto" nor "tokenization"; fiscal 2027 still has no crypto section, but "tokenization" appears twice — among the "high-risk areas" for clearing agency exams (p. 10), and among "emerging trends" for Regulation SCI exams (p. 13). In an official video, Division Director Keith Cassidy groups it with "super intelligence" and "changes in market infrastructure" under technology (01:22), adding that the priorities "are not an exhaustive checklist" (01:54). The report is a staff document with no legal force.

Judging by how these three reports are organized, 2027 places tokenization squarely in clearing and trading-system items. We treat that as a signal worth tracking, not proof that the SEC's overall approach has shifted. It points the same way as the three questions: what matters is not only the token, but the systems and relationships behind it.

7 · Next time you see a familiar name

Next time a familiar name shows up on a token — a bank, a company, a fund — don't stop at "is this really them?" Ask:

1. Who owes me? A bank, an issuer, or a Tokenizer in the middle? 2. What do they owe? A deposit, a redemption promise, or "a security entitlement to one share"? 3. Where is it written? Which agreement, which law, which regulator?

Watch the moment of conversion. It may be one tap — and your rights and protections may have changed.

One question for you: before buying a token with a familiar name, what would you most want to know first — whether you can redeem it, whom to turn to if something breaks, or how dividends and votes reach you? Why?

IKOL's calls · four testable inferences

These are our judgments. We'll check them publicly when they come due. Resolution rules are in Appendix 3.

Appendix 1 · What's documented, what's our view

Appendix 2 · Sources

Discovery layer: IKOL archive, Aug 5–Oct 25, 2026; 245 deduplicated items on tokenization, about 60% on tokenized stocks.

Appendix 3 · Resolution rules (frozen Oct 25, 2026)

1 (deadline Dec 31, 2026): count N on the latest valid official list available before the deadline, one per company. 23 ≤ N ≤ 31 = hit; any other number = miss; having reached the range at some point doesn't count. If no new notice but the old list is available, use it. Venue formally withdraws the plan and the list: "not testable." N indeterminable only because evidence is unavailable: "not testable." (Three of the 22 — Cerebras, Arm, Wells Fargo — were not on the Oct 4 roster, so we count totals, not a share of that roster.)

2 (after the FY2028 report; by Dec 2027): A = no standalone crypto-asset section in contents or text (synonyms such as "Digital Assets" count as one); B = tokenization appears under clearing agency, trading-system compliance (e.g., Reg SCI) or market-structure/infrastructure items. A and B = hit; anything else = miss. No report by Nov 30, 2027: "not testable."

3 (deadline June 30, 2027): only products opened to eligible retail customers after Oct 25, 2026, by U.S. chartered banks other than SoFi, counted per legal entity, with official evidence of two-way conversion between deposit and stablecoin. Announcements, pilots and institution-only products don't count. Search channels: bank press releases and product terms, OCC and FDIC releases, major financial media. None found: "miss under the stated public-evidence standard"; evidence published before the deadline but found later may be added with a public correction.

4 (deadline June 30, 2027): BIS press releases, reports or speeches published before the deadline. Explicit disclosure of at least one real-value transaction test = hit; restated plans or preparatory work only = miss; project ended = miss; disclosure after the deadline doesn't count, even if the test happened earlier.

IKOL · AI-assisted research, human-edited. We label what is documented and what is our view — and publish our corrections. Not investment or legal advice.