Equity Tokenization | SettleMint

Equity assets digitize traditional equity securities, combining advanced blockchain capabilities with robust governance and compliance tools. Designed for banks, corporations, and financial institutions, they enable secure issuance, distribution, and management of equity in a digital format.

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What Are Equity Tokens?

Equity tokens represent ownership in companies, funds, and investment vehicles. They bring transparency, automation, and real-time visibility to equity management while maintaining compliance with regulatory frameworks.

These tokens modernize traditional equity systems by digitizing share ownership and governance. They eliminate manual workflows, reduce administrative overhead, and bring instant transparency to shareholder records and corporate actions.

Key characteristics include:

Digital representation of shares or voting rights
Built-in compliance logic for regulatory requirements
Automated cap table management and ownership tracking
Shareholder voting and governance mechanisms

Benefits for Financial Institutions

Enhanced Liquidity and Market Access

Tokenized equity allows financial institutions to digitize various equity assets, including private equity shares, limited partnership interests, or real assets. These tokens support fractional ownership, enabling smaller investors to participate in traditionally illiquid asset classes.

This fractional approach increases liquidity and enables peer-to-peer trading of shares that would otherwise take years to exit. Investors benefit from earlier portfolio rebalancing opportunities, while asset owners gain access to broader capital pools and improved valuation potential.

Improved Governance and Voting

Governance is significantly improved through on-chain voting capabilities. Each token can carry proportional voting rights, allowing shareholders to participate in ballots remotely using blockchain-based interfaces.

Votes are recorded immutably and instantly tallied by smart contracts, ensuring transparency and reducing fraud risk. This digital approach replaces legacy models of paper proxies and manual vote counting, lowering costs and enabling cross-border shareholder participation.

Real-Time Cap Table Management

With tokenized equity, cap table management becomes real-time and fully transparent. Each transfer of tokens updates the ownership register automatically, giving companies an up-to-date view of who holds their shares.

Corporate actions like stock splits or dividend distributions can be executed directly through smart contracts, eliminating intermediaries and manual recordkeeping. This reduces legal complexity, enhances due diligence accuracy, and simplifies audits.

Core Capabilities

Issuance and Management

Equity tokens are issued and distributed through a permissioned process, ensuring only authorized parties can mint or transfer ownership. The system supports different share classes with unique rules, rights, or constraints, offering flexibility for complex capital structures.

Supply management roles control how shares are created and distributed, while user management roles handle permissions to ensure compliance with securities regulations.

On-Chain Governance

The system embeds governance capabilities to support digital voting and transparent decision-making. Each tokenholder's voting rights are tracked and enforced, allowing secure and immediate execution of shareholder resolutions.

These features simplify:

Board approvals and resolutions
Annual general meetings
Corporate referenda and shareholder votes

Compliance and Security

Administrative controls allow designated operators to pause transfers or take emergency action during audits, legal interventions, or market disruptions.

Compliance features include:

Blocklisting to prevent unauthorized access
Whitelisting to restrict transfers to approved participants
Transaction restrictions to enforce regulatory requirements
Detailed audit logging for all token activities

User Experience

Meta-transaction support allows institutions to offer gasless transactions to investors. Transactions can be relayed through approved third parties, reducing the need for investors to manage blockchain wallets or cover transaction fees directly.

This improves onboarding and ease of use, particularly in regulated environments or investor portals where user experience must meet enterprise-grade standards.

Use Cases

For Companies and Startups

Companies can issue digital shares to investors, update cap tables in real time, and execute governance actions securely online. This simplifies equity management from early-stage funding rounds through to mature operations.

For Investment Firms

Financial institutions can design innovative investment products using tokenized equity. For example, banks might create tokenized index funds or exchange-traded products that include shares of multiple companies, with each token representing a small share of a diversified portfolio.

Revenue-sharing rights, performance-based rewards, or conditional access rights can all be programmed into the token, creating new opportunities for financial innovation.

For Market Infrastructure

In private markets, equity tokens improve transparency and liquidity. In public offerings, they streamline regulatory filings and settlement operations. The technology supports the full spectrum of digital capital management across market infrastructures.

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Why Choose Tokenized Equity?

Tokenized equity transforms how organizations issue, manage, and trade shares in a secure and future-ready framework. By integrating programmable governance, automated compliance, and secure ownership tracking, it:

Enhances transparency across shareholder communications
Reduces administrative costs through automation
Creates new opportunities for financial product innovation
Simplifies regulatory reporting and compliance management
Improves investor access and participation

Financial institutions using equity tokens benefit from modern, compliant, and efficient approaches to equity management in an increasingly digital financial landscape.

Start Building with Equity Tokens

The Asset Tokenization Kit provides everything needed to issue, manage, and trade equity tokens with institutional-grade security and compliance.

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