CZ: On-chain IPOs are no longer theory after Europe’s €2.07M first

Wall Street’s oldest ritual — the initial public offering — is starting to show up on blockchains instead of just on trading floors. Binance founder Changpeng “CZ” Zhao told the crypto industry on Sept. 7 that on-chain IPOs are no longer a theoretical exercise, arguing that regulated exchanges and blockchain infrastructure providers are building the plumbing needed to bring public offerings fully on-chain. His comment lands at a moment when at least one company has already pulled it off, and several major U.S. and European market infrastructures are racing to catch up.

Key takeaways

• Binance founder CZ said on Sept. 7 that IPOs “will move on-chain” as regulated infrastructure expands.
• French aerospace supplier ST Group completed what Clifford Chance called the world’s first fully tokenized IPO, raising €2.07 million in April via 113,525 shares at €18.25 each on the Lightning Stock Exchange under the EU’s DLT Pilot Regime.
• The SEC approved Nasdaq’s tokenized-securities pilot on March 18, and NYSE filed a similar rule change on April 9 for the Depository Trust Company pilot.
• DTCC ran live production tests with roughly 40 firms on July 15 and expects a broader tokenization service launch in October 2026.
• Tokenized stocks vary widely in legal substance, and regulators warn that some structures offer no real ownership rights at all.

Binance’s Vision for On-Chain IPOs

CZ’s forecast is simple: as blockchain rails mature and regulators sign off, public offerings will migrate from paper-based settlement systems to distributed ledgers. Speaking on Sept. 7, the Binance founder said IPOs “will move on chain” as regulated exchanges and blockchain companies expand the infrastructure needed to support tokenized securities. It’s a bold claim from someone whose company sits at the center of crypto trading, but it isn’t coming out of nowhere — it follows a string of real-world pilots that have already tested the concept in both Europe and the United States.

Europe’s First Fully Tokenized IPO via ST Group

Europe already has a working example, and it happened months before CZ’s remarks. French aerospace and defense supplier ST Group completed a fully tokenized initial public offering through the Paris-based Lightning Stock Exchange, known as Lise, back in April. The company raised €2.07 million by selling 113,525 shares priced at €18.25 each, all under the European Union’s Distributed Ledger Technology Pilot Regime.

The ST Group Tokenized Offering Details

What made the deal different from typical tokenized-stock products is timing: ST Group issued its equity on a blockchain-based market from the very start of the offering, rather than wrapping already-listed shares into tokens afterward. Investors who bought in received regulated shares carrying real ownership, not tokens designed purely to mirror a stock’s price. Crypto.news had previously reported that Lise planned to run Europe’s first fully on-chain IPO through ST Group, and the completed transaction proved a company can run a primary offering entirely through distributed-ledger infrastructure inside an established securities framework.

Legal Recognition of the Tokenized IPO

Legal adviser Clifford Chance formally described the ST Group offering as the world’s first fully tokenized IPO in its transaction record — a label that matters because it distinguishes the deal from earlier tokenized-stock experiments that only replicated existing shares rather than issuing new ones natively on-chain. That distinction is likely to become a reference point as other exchanges attempt similar deals.

Development of Regulated Blockchain Infrastructure

Beyond Europe, several major financial infrastructure players are quietly building the rails for blockchain-based capital raising, even without a headline deal yet. Cantor Fitzgerald and Securitize announced in July that they are developing regulated infrastructure meant to support IPOs and follow-on offerings, while keeping traditional underwriting, compliance and investor-protection steps intact. Neither firm has named the first external issuer that will actually use the system, so the real test of that partnership is still ahead.

In the United States, the push is coming through existing exchanges rather than new venues. The SEC approved Nasdaq‘s tokenized-securities pilot on March 18, letting eligible participants trade tokenized versions of selected Russell 1000 securities and major index-linked ETPs. Tokenized and conventional shares share the same order book, ticker, CUSIP, price and shareholder rights, and participants can instruct the Depository Trust Company to settle eligible trades in tokenized form. NYSE followed with its own SEC filing on April 9, setting up a framework for tokenized securities to trade alongside conventional shares under the same DTC pilot. Neither program amounts to a native on-chain IPO — both simply apply blockchain-based settlement to securities that already trade within existing market structures.

DTCC’s Tokenization Testing and Timeline

The clearing side of the market is moving too. The Depository Trust Company conducted live production transactions involving about 40 firms on July 15, marking the shift of its tokenization service from development into actual production activity. According to DTCC’s official update, a broader launch of that service is expected in October 2026 — a date that now stands as one of the clearer near-term milestones for how fast on-chain IPO infrastructure will actually scale.

Legal and Regulatory Considerations for Tokenized Stocks

Not every “tokenized stock” means the same thing legally, and that gap matters for anyone thinking about buying in. The term can describe an issuer placing its official shareholder register directly on a blockchain, or it can describe a third party issuing a token backed by shares held in custody elsewhere. A separate category offers only synthetic exposure to a stock’s price without transferring any real ownership — holders of those products may have no voting rights, no dividends and no legal claim against the company the token is supposed to track.

The SEC laid out these distinctions in a January statement, dividing tokenized securities into issuer-sponsored and third-party-sponsored structures. The agency made clear that moving ownership records onto a blockchain doesn’t change how federal securities laws apply — offers and sales still need to be registered unless an exemption applies. That statement came from SEC staff rather than a formal Commission rule, so it carries no independent legal force, though it signals how regulators currently view the space. Transfer agents have pushed regulators to favor issuer-backed structures over third-party tokens, warning that the latter could expose investors to bankruptcy risk or weaker ownership protections — a concern that industry groups have raised directly with the SEC.

Challenges and Limitations of On-Chain IPOs

Putting shares on a blockchain doesn’t remove the humans and institutions that make an IPO work in the first place. Underwriters, auditors, lawyers, transfer agents and other regulated intermediaries still perform functions that go well beyond simply recording a transaction, and tokenization hasn’t changed that. This is one of the clearer reasons why full automation of the IPO process remains a distant goal rather than an immediate outcome.

Liquidity is another sticking point. Round-the-clock trading, one of the selling points of blockchain settlement, requires continuous liquidity, active market surveillance and reliable cash settlement to function safely. A token might stay technically transferable even when its underlying market is closed, but thin liquidity in those windows can widen price gaps and make order books more volatile. Traditional exchanges are already testing fixes: the London Stock Exchange and Kraken parent Payward are exploring tokenized UK public equities, with LSE 24 potentially supporting trading in xStocks during 2027, pending regulatory approval. That project remains under development and isn’t itself a confirmed on-chain IPO — a reminder that the next real proof point will likely come from DTCC’s October 2026 launch, further SEC rulings, or the first large issuer to actually use the Cantor Fitzgerald–Securitize system.

FAQ

What did Binance founder CZ say about the future of IPOs?

CZ stated on Sept. 7 that initial public offerings will move on-chain as regulated exchanges and blockchain firms expand infrastructure for tokenized securities.

What was significant about the ST Group IPO?

ST Group completed the world’s first fully tokenized IPO on the Lightning Stock Exchange under the EU’s Distributed Ledger Technology Pilot Regime in April.

How are U.S. exchanges supporting tokenized securities trading?

The SEC approved Nasdaq’s pilot allowing trading of tokenized Russell 1000 securities on March 18, and NYSE filed a rule change for trading tokenized securities alongside conventional shares on April 9.

Do tokenized stocks always grant full ownership rights?

No, tokenized stocks vary; some represent true ownership while others provide only synthetic exposure without shareholder rights, according to the SEC.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.