The Future of Ownership: Tokenization and the Next Frontier of Corporate Governance

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Tokenization is reshaping securities ownership, creating new opportunities for market efficiency while raising critical questions about shareholder rights, voting integrity and corporate governance.

As institutions such as DTCC, Broadridge and Nasdaq advance blockchain-enabled securities infrastructure, boards face a fundamental question. Can companies confidently identify who owns their shares, who is entitled to vote and how those rights are protected?

Kingsdale’s latest white paper, The Future of Ownership: Tokenization and the Next Frontier of Corporate Governance, examines these emerging challenges and outlines practical priorities to help boards and issuers prepare for evolving ownership structures.

Understanding Tokenized Securities and Shareholder Rights

The rights attached to tokenized securities depend on their legal and operational structure. Kingsdale examines three models with distinct governance implications.

- Issuer-sponsored tokenization involves securities tokenized with the issuer’s authorization, potentially allowing holders to exercise the same rights as conventional shareholders.

- Custodial tokenization provides an indirect interest through an intermediary, with voting rights determined by the custody arrangement.

- Synthetic tokenization provides economic exposure to shares without necessarily conferring legal ownership or voting rights.

While all three models may reference the same company, they create different ownership relationships, shareholder entitlements and governance considerations.

Emerging Ownership Gap

Central to Kingsdale’s analysis is the ownership gap, the potential divergence between economic exposure, legally recognized shareholder rights and issuer visibility.

As tokenized and conventional securities coexist, fragmented ownership records across shareholder registers, intermediaries and blockchain networks could complicate shareholder identification, voting reconciliation and corporate actions. These challenges become particularly consequential during contested elections, activist campaigns and closely decided transactions, where voting integrity is critical.

Canadian issuers face additional risks from third-party tokenized products that may create economic exposure to their shares outside established shareholder identification channels, further limiting ownership visibility.

Regulatory Developments in Canada and the United States

Regulators in North America are advancing frameworks for tokenized securities within existing capital markets.

In the United States, the Securities and Exchange Commission has clarified the application of securities laws to tokenized instruments, while Canada’s securities regulators are examining tokenized financial instruments and market infrastructure through the CSA’s Project Tokenization.

These developments underscore the importance of aligning innovation with legally recognized ownership, investor protections and established corporate governance requirements.

Tokenization Gains Momentum in Canada

Canadian financial institutions are also exploring the potential of blockchain-enabled market infrastructure. In March 2026, Project Samara, involving the Bank of Canada and financial-sector participants, demonstrated the issuance, trading and settlement of a tokenized bond using wholesale central bank money.

The initiative provided insights into the operational, legal and infrastructure requirements associated with tokenized financial instruments. Separately, Canada's six largest banks announced an initiative in September 2026 to explore a shared tokenized Canadian-dollar deposit system, initially focused on interbank transfers.

These developments demonstrate growing institutional interest in integrating tokenization into Canada's established financial system.

Governance Risks Boards Should Understand

Tokenization introduces new operational and governance risks across custody, settlement and market infrastructure.

Key considerations include private-key security and unauthorized transfers, legal certainty around transaction finality, control over smart contract functions, and fragmented liquidity and ownership records across platforms and jurisdictions.

For boards and issuers, these risks become particularly significant when they compromise shareholder visibility, voting entitlement reconciliation or the integrity of corporate decisions.

Case Study: Galaxy Digital's Onchain Shareholder Vote

Galaxy Digital provides an early example of how tokenized securities can be incorporated into established shareholder governance processes.

Following the introduction of tokenized Class A shares on the Solana blockchain in 2025, Galaxy enabled eligible tokenized shareholders to participate in onchain voting at its May 2026 annual meeting through infrastructure supported by Broadridge.

The initiative demonstrated the feasibility of integrating blockchain-enabled voting into a conventional shareholder meeting.

However, tokenized shares represented approximately 0.007% of Galaxy's outstanding Class A shares, and the meeting was uncontested. The experience therefore provides an early operational example, with important questions remaining about scalability and performance in contested voting situations.

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Kingsdale's white paper provides a deeper examination of the emerging ownership gap, evolving regulatory and market developments, and five practical priorities for issuer readiness. For a private discussion on the governance implications of tokenization, contact strategy@kingsdaleadvisors.com