European regulator says tokenised stocks risk 'investor misunderstanding'


FILE PHOTO: Representations of cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

PARIS (Reuters) -Blockchain-based assets which provide exposure to equities could lead to "investor misunderstanding", as they typically do not make the buyer a shareholder in the underlying company, the European Union's securities watchdog said on Monday.

So-called tokenised stocks are a type of blockchain-based asset which are linked to the price of a share in a public company. Broker Robinhood has launched tokenised stocks in the EU while crypto exchange Coinbase is also making a push into the nascent sector.

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