The utility of tokenized equities is expanding, with a significant development allowing Galaxy (GLXY) equity holders to engage in proxy voting through an annual shareholder vote. In May, GLXY token holders will utilize Broadridge’s governance platform, which operates on the company’s Avalanche-powered layer-1 network.
“Tokenization is set to transform capital markets significantly; this move marks a crucial advancement toward a fully tokenized equity market,” stated Mike Novogratz, Galaxy CEO and founder. He emphasized that proxy voting, essential in equity ownership, has now transitioned onto the blockchain for public companies.
The development follows an announcement by Broadridge, a fintech firm handling trillions for thousands of public entities, about its efforts to facilitate on-chain shareholder governance globally using Avalanche technology.
Investors will be able to cast their votes and access investor materials directly through digital wallets via the integration of Broadridge’s ProxyVote platform.
“The need for precise, scalable, and economical governance mechanisms is essential for the expansion of tokenized equities,” noted Tim Gokey, CEO of Broadridge.
Earlier this month, Nasdaq secured SEC approval to conduct a pilot program trading in tokenized stocks. This development follows similar initiatives by major crypto firms like Coinbase, Kraken, and Binance, who are integrating their services with traditional financial products.
However, the International Monetary Fund (IMF) has cautioned that the rise of tokenized finance could exacerbate future financial crises, as reported earlier this week.
On the day of the announcement, Broadridge (BR) shares rose by 0.8% to $161.91, while Galaxy (GLXY) increased by 1.79% to $17.96. Comments from representatives at both firms were not immediately available in response to Decrypt’s inquiry.