Twenty-five years ago, a massive technological disruption changed the music industry for good. It came via Napster, a platform that let anyone share digital song files, and its sudden popularity upended a nearly century-old distribution model. In response, musicians like Metallica and Dr. Dre, along with their record labels, waged a fierce counter-attack, and drove Napster out of business. But it soon became clear, there was no putting the tech back in the bottle. Now, something similar is playing out in the brokerage industry as a result of another disruptive technology—blockchain—that is leading a growing number of companies to tokenize stocks.
This has been going on for a while, but the disruption posed by blockchain-based stocks made headlines last week after the CEO of AMC had a public tantrum accusing Robinhood of “contemptible, outrageous, disgusting, detestable, inexcusable, vile” behavior for putting its stocks on-chain without permission. Robinhood’s CEO retorted that, just because a company issues a stock, it can’t totally limit what those who buy it can do.
