Key Takeaways
Republic is launching digital tokens that track the performance of SpaceX shares, allowing retail investors access to private company investments.
Token holders do not own actual company stakes, and regulatory challenges remain a potential hurdle for tokenized shares.
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Global investment platform Republic is launching digital tokens that track the private share performance of SpaceX, expanding its strategy to offer retail investors exposure to top-tier companies, according to a report released on Wednesday.Republic will begin selling tokens that mirror SpaceX’s private shares this week, with plans to expand to other major private firms such as OpenAI and Anthropic. The platform specializes in a wide range of alternative assets, including early-stage startups, real estate, crypto projects, and video games, among others.These tokens, which do not equate to actual company stakes, mirror the performance of private shares and are based on secondary market trends. Republic’s initiative, permissible under the JOBS Act through a Regulation Crowdfunding exemption, does not require the approval of the tokenized companies, the company stated.“I’m confident in the tokens’ legality, but it’s possible regulators might take a different view,” said Republic CEO Kendrick Nguyen.Investors don’t own shares of SpaceX, but rather digital tokens issued by Republic that entitle them to cash payouts if SpaceX’s value increases.The initiative may face regulatory challenges, as past efforts to tokenize stocks have run into legal roadblocks. Binance’s 2021 Tesla token experiment ended after authorities raised concerns over licensing.Kraken last month announced its plans to launch tokenized shares of 50 US stocks and ETFs, including Musk’s Tesla. The offer, however, will be available only to non-US investors.Coinbase is seeking SEC approval to introduce tokenized stock trading, aiming to directly compete with leading retail brokers like Robinhood and Charles Schwab. The firm is pursuing a no-action letter from the SEC, which would provide assurance of compliance with securities laws and facilitate institutional adoption of crypto and blockchain technologies.
