Republic plans to tokenize shares of private companies like SpaceX and OpenAI: WSJ
Quick Take
- Republic plans to offer blockchain-based assets that will track shares of SpaceX and other private firms in an effort to improve retail investor accessibility, the Wall Street Journal reports.
- The firm reportedly said provisions in the 2012 Jumpstart Our Business Startups (JOBS) Act enables U.S. trading platforms to raise up to $5 million per year from retail investors by issuing securities.
- Individuals who hold company-tracking tokens for a year will be able to trade them on the crypto trading platform INX, whose parent firm Republic agreed to acquire in April.
Investment platform Republic plans to offer digital assets tracking the performance of Elon Musk's space-faring firm SpaceX as part of an effort to expand retail investor accessibility to private companies, the Wall Street Journal reported on Wednesday.
Republic plans to acquire SpaceX shares and issue a blockchain-based equivalent that tracks those holdings, according to the WSJ. The investment platform also intends to launch digital tokens tracking the performance of private artificial intelligence firms OpenAI and Anthropic in addition to SpaceX.
Moving traditional equities markets onchain has been a longtime ambition for the crypto industry, which has largely been held back by regulatory uncertainty. Holders of Republic's tokens will not have direct access to these private shares and will not be considered shareholders, but the blockchain-based assets will offer retail traders exposure to otherwise inaccessible investment opportunities.
Republic said it can issue these tokens due to provisions in the 2012 Jumpstart Our Business Startups (JOBS) Act, which lets firms based in the United States raise up to $5 million per year from retail investors by issuing securities, according to WSJ sources.
Holders will be able to buy anywhere between $50 to $5,000 worth of these digital assets, much lower than the $10,000 or $100,000 minimum typically required to invest in a private company.
Individuals who hold company-tracking tokens for a year will also be able to swap them on the crypto trading platform INX. In April, Republic agreed to acquire parent firm INX Digital for up to $60 million to beef up its real-world asset, security token, and other crypto investment services, The Block previously reported.
It's unclear whether SpaceX will contest the tokenization of its shares. However, the space firm embraced cryptocurrency in the past. In 2021, Elon Musk said SpaceX acquired bitcoin, making it one of the earliest firms to add crypto to its balance sheet. As of June 25, SpaceX holds 8,285 BTC valued at about $894.46 million, according to Arkham.
The Block reached out to Republic for confirmation and comment.
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