Investment platform Republic has announced it will provide retail investors with tokenized exposure to SpaceX shares.

The digital tokens will represent the shares but will not grant outright ownership of the underlying assets.

The New York-based firm will launch SpaceX token sales this week, with possible future offerings in OpenAI, Anthropic, Stripe, and Waymo.

Investors can commit between US$50 and US$5,000, lowering the usual threshold for private equity investments.

Tokenization of assets via blockchain is rising for its promise of better accessibility, lower costs, and more transparency, though regulatory clarity is still lacking.

Republic says it doesn’t need company approval for these offerings, as interest in tokenized stocks grows among US regulators and crypto firms like Coinbase.

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🔗 Source: CNBC

🧠 Food for thought

1️⃣ Tokenization builds on decades of secondary market evolution

Republic’s move to tokenize SpaceX shares represents the latest evolution in private market liquidity that began long before blockchain technology existed.

The private equity secondaries market, where investors trade existing private fund stakes, grew dramatically from just $16 billion in 2008 to $70-$80 billion in 2018, demonstrating increasing demand for liquidity in traditionally illiquid investments1.

This historical growth provides important context: tokenization isn’t creating demand for private asset liquidity out of thin air, but rather addressing a long-established market need using new technology.

Secondary market transactions have historically delivered impressive returns, with a median IRR of 21.3% compared to 12.5% for traditional private equity investments and 10.2% for funds of funds1.

Republic’s approach builds upon this foundation but aims to dramatically lower barriers to entry. Traditional secondary markets typically require specialized knowledge and large minimum investments that exclude retail participants.

2️⃣ Regulatory approaches to tokenized securities vary significantly by jurisdiction

Republic’s tokenization initiative launches amid an evolving and fragmented global regulatory landscape for digital securities.

Switzerland established itself as an early leader in this space, with Mt Pelerin issuing the first legally recognized tokenized shares under Swiss law in 2018, complete with voting and dividend rights2.

Singapore has taken a pragmatic approach by treating tokenized real-world assets as securities under its existing Securities and Futures Act, providing regulatory clarity while maintaining investor protections3.

The UAE has specifically created the Virtual Asset Regulatory Authority (VARA) to oversee digital assets, establishing a dedicated framework rather than trying to fit tokenized assets into existing regulations3.

In contrast, the United States has primarily relied on applying existing securities laws to digital assets, with the SEC granting occasional no-action relief for specific use cases, such as Pocketful of Quarters’ gaming token in 20194.

This regulatory diversity explains why Republic is proceeding cautiously, with its CEO acknowledging they’re “pushing that risk envelope” despite using structures “built on securities law from the 1930s.”

3️⃣ Tokenization is removing traditional barriers to private market access

Republic’s $50-$5,000 investment range for SpaceX tokens represents a dramatic departure from traditional private equity minimums, which typically start around $10,000 and often require accredited investor status.

The lock-up problem has been a persistent barrier in private markets, with investors traditionally committed for 5-10 years in venture capital and private equity funds—a liquidity constraint that tokenization specifically addresses5.

These investment minimums aren’t arbitrary—they reflect the administrative costs and complexities of managing numerous small investors in traditional private market structures, challenges that blockchain technology can potentially overcome through automation.

The increased accessibility comes with trade-offs, as traditional private market structures provided natural investor protection through their high barriers to entry, while more accessible markets may require different safeguards to protect less sophisticated investors.

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