CoinTelegraph
Cardano Foundation CEO Frederik Gregaard says tokenization fails when an asset moves on-chain without the ownership rights that attach to it. Holding a blockchain token therefore does not necessarily mean holding the same legal or economic rights as the underlying stock.
The distinction is central to tokenized assets: on-chain transferability and legal ownership are separate requirements. Projects that connect the two can better represent claims such as dividends, voting rights and control.
For investors, token structure and legal enforceability matter as much as chain activity. A token can be recorded efficiently while leaving critical rights outside the chain or with another entity.
Source: [Cardano CEO: 99% of Tokenization Is Broken (Here’s the Fix), — YouTube](https://www.youtube.com/watch?v=TZ2_qml-_Oo)
Frequently asked questions
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Does owning a tokenized stock mean owning the underlying stock?
Not necessarily. Ownership rights can remain with another entity unless the token is legally designed to represent and transfer those rights.
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Which rights can be separated from an on-chain asset?
Dividend, voting and control rights can remain outside the chain even when a token is freely transferred on-chain.
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Why does tokenization need legal structure?
Legal structure connects blockchain records to enforceable economic and governance rights for token holders.
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What separates tokenization from simple on-chain registration?
Complete tokenization combines technical transferability with the legal rights attached to the underlying asset.
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Why is Cardano discussing ownership rights?
Cardano’s CEO argues that many tokenized assets fail to transfer the full ownership proposition represented by traditional securities.
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