Glossary

In plain English: short definitions of the terms this wiki uses, A to Z. Each one links to a source and to the pages that go deeper.

New to all of this? Start with the overview, then come back here when a word trips you up. Reference information only, not investment advice.

Jump to: A · B · C · D · E · F · H · I · K · L · M · N · O · P · R · S · T · U · W

A

Admin keys

Keys that control privileged token functions, such as pausing, freezing a wallet, forcing a transfer or upgrading the contract. Who holds them, and how they are protected, is a core custody and governance question. (EIP-3643)

Allowlist

A list of approved wallet addresses. A permissioned token only moves to wallets on the list, which is how identity checks are enforced onchain. (EIP-3643)

Related: ERC-3643 (T-REX) · Who can buy

AMM (automated market maker)

An onchain pool, also called a liquidity pool: a smart contract that holds two assets and sets prices by a formula, so traders swap against the pool instead of being matched with a buyer or seller. (BIS CPMI)

Atomic settlement

Both sides of a trade settle in one indivisible step: either everything moves or nothing does. Atomic DvP is the common case. (BIS)

Related: Settlement & matching

ATS

An alternative trading system: an SEC-regulated venue run by a broker-dealer that matches orders but is not a full stock exchange. (Figure)

Related: Figure OPEN

Authorized Participant

A large firm, usually a market maker, allowed to create (mint) and redeem tokens directly with the issuer. Ordinary holders buy and sell on the market instead. (Base docs)

B

B20

The token standard on Base that Coinbase’s tokenized stocks use. (Base)

Related: Coinbase B20

Bankruptcy-remote

Set up so that if the parent company fails, its creditors cannot reach the assets held for token holders. (Coinbase)

Related: Custody

Base

A layer 2 blockchain built on Ethereum and run by Coinbase. (Base docs)

Broker-dealer

A firm registered with the SEC to buy and sell securities for customers (broker) or for itself (dealer). Most people buy stocks through one. (Ondo docs)

Related: Custody

C

Canton

A permissioned blockchain network built for financial institutions, with privacy between parties. TSV LLC plans to run its tokenized stock venue on Canton (TSV LLC), and DTCC’s Tokenization Service runs on it, with CIP-56 as the token standard (DTCC tear sheet).

Related: Innovation Exemption

CIP-56

The token standard DTCC’s Tokenization Service uses on the Canton Network (it uses ERC-20 on its private Besu network). (DTCC tear sheet)

Related: DTCC Tokenization Service

CCP

A central counterparty, or clearinghouse. It steps between buyer and seller so each side faces it instead of each other, and nets trades to reduce how much cash and stock must move. (FSB 2024)

Related: Settlement & matching

Cede & Co.

DTC’s nominee. For most US shares held through brokers, it is the holder on the company’s register. (Securitize letter)

Related: DTC tokenization pilot · Street name

Compliance hook

Code that runs on every token transfer or swap and can block it if a rule fails, such as an unverified receiver. Examples: the ERC-3643 compliance contract, Solana transfer hooks and Uniswap v4 permissioned-pool hooks. (EIP-3643; Uniswap)

Composability

Tokens on the same chain can plug into other apps, for example being posted as loan collateral, without special integration work. (WEF 2025)

Corporate action

An event the issuer causes that changes what a shareholder holds or gets: dividends, splits, mergers, votes. Wrapped stock tokens often handle them with a multiplier. (xStocks)

CSD

A central securities depository: the institution that holds securities centrally and records who owns them at the top level. In the US that is DTC. (FSB 2024)

Related: DTC tokenization pilot

CUSIP

The 9-character ID code for a US security, like a serial number for a stock or bond. DTC-tokenized securities keep the same CUSIP as the book-entry security. (SEC Nasdaq approval; DTCC tear sheet)

Related: Reg NMS-inside model

Custodial wrapper

A token backed one-for-one by a real share held at a custodian. You own a claim on that share, not the share itself. (SEC staff statement)

Custodian

A regulated firm that holds assets for someone else. For wrapped tokens, the custodian holds the real shares behind the tokens. (IOSCO)

Related: Custody

D

Digital Securities Sandbox

A UK Bank of England and FCA sandbox, running until January 2029, where firms can issue, trade and settle securities, native or tokenised, on new technology. (Bank of England)

Related: Rules by jurisdiction

Direct Registration System (DRS)

DTC’s system for moving shares between its nominee Cede & Co. and the holder’s own name on the issuer’s books, kept by the transfer agent. DTC has proposed cutting its processing “from days to minutes”. (SEC notice)

Related: DTC tokenization pilot · Securitize

DLT

Distributed ledger technology: a shared database copied across many computers. Blockchains are one type. (IOSCO)

DLT Pilot Regime

An EU framework that lets approved market infrastructures trade and settle tokenized securities on DLT with some rules relaxed. (ESMA)

DTC

The Depository Trust Company, the US central securities depository. It runs a tokenization pilot under an SEC no-action letter. (SEC Nasdaq approval)

Related: DTC tokenization pilot

DTCC

The Depository Trust & Clearing Corporation, parent of DTC. It provides clearing and settlement for most US stock trades. (DTCC)

Related: DTC tokenization pilot

DWAC

Deposit/Withdrawal at Custodian: a DTC process for moving shares in and out of DTC through the transfer agent. Securitize asked DTC to modernize it alongside DRS. (Securitize letter)

DvP

Delivery versus payment: the security is delivered only if the payment is made. Onchain, both legs can move in one transaction (atomic DvP). (BIS)

Related: Settlement & matching

E

Entitlement token

A token that is a security entitlement to a share held by a broker or custodian, backed 1:1. Securitize’s version is a convertible entitlement token (CET): when the company adopts issuer-sponsored tokenization, holders can convert it into a share recorded on the company’s register. (Securitize)

ERC-1400

A draft Ethereum standard suite for security tokens, with transfer checks, documents and forced transfers. (Spec)

Related: ERC-1410

ERC-20

The basic Ethereum token standard. Most tokens, including many stock tokens, follow it or extend it. (Ondo docs)

Related: Token primitives

ERC-3643

An Ethereum standard for permissioned tokens: a transfer only goes through if both wallets pass identity and compliance checks. (EIP-3643)

Related: ERC-3643 (T-REX)

ETF

An exchange-traded fund: a fund whose shares trade on an exchange like a stock. (PR Newswire)

Related: xStocks (Backed)

Ethereum

A public blockchain that runs smart contracts. Many token standards (ERC-20, ERC-3643) were written for it. (EIP-3643)

Related: Token primitives

Exemptive relief

Permission from the SEC to do something an existing rule would otherwise forbid, usually with conditions. (WisdomTree)

F

FINMA

Switzerland’s financial market regulator. It licenses DLT trading facilities under the DLT Act in force since 1 August 2021. (FINMA)

Related: Rules by jurisdiction

FSRA (ADGM)

The Financial Services Regulatory Authority of Abu Dhabi Global Market, a financial free zone in the UAE. bStocks are admitted to its Official List. (ADGM prospectus)

Related: bStocks · Rules by jurisdiction

H

Halt

A pause in trading a stock, ordered by the primary exchange or a regulator. TSVs must stop trading a token while its stock is halted. (SEC order)

Hybrid matching

Trades are matched off chain (for example on an order book) and then settled on chain, instead of being priced and settled by an onchain pool in one step.

I

Identity registry

The ERC-3643 contract that records which wallets belong to verified investors; a transfer only succeeds if the receiver is verified. (ERC-3643 docs)

Related: ERC-3643

Innovation Exemption

A temporary, conditional SEC order from 17 Sep 2026 that lets approved onchain venues (TSVs) trade tokenized US stocks. (SEC order)

Issuer-sponsored token

A tokenized share that the issuing company itself sponsors, tied directly to its official shareholder register so holders keep ownership rights, votes and corporate-action entitlements. (Bullish)

K

KYC

Know your customer: identity checks a firm must run before letting you open an account or hold certain assets. (FSB 2024)

Related: Who can buy

L

Layer 2

A blockchain that runs on top of another (usually Ethereum) to make transactions cheaper and faster. Base is one. Also written L2. (Base docs)

Related: Coinbase B20

llms.txt

A plain-text index of a website written for AI models: one line per page with a short summary. This wiki publishes one at llms.txt. (llmstxt.org)

Related: Build with this wiki

M

MiCA

The EU’s Markets in Crypto-Assets Regulation. It covers crypto-assets that are not financial instruments, so tokenized shares usually fall under MiFID II instead.

MiFID II

The EU’s main law for investment firms and trading venues. Tokenized shares and derivatives such as Robinhood’s EU stock tokens are covered by it. (Robinhood EU FAQ)

Mint

To create new tokens. For backed stock tokens, tokens are minted when the matching shares are bought and put in custody. (Base docs)

Related: Coinbase B20

Money market fund

A fund that invests in very short-term, low-risk debt such as Treasury bills. Many of the largest tokenized products are money market funds. (IOSCO)

Multiplier

A number that converts one token into shares of the underlying stock. It changes after splits or reinvested dividends so token balances stay the same while each token is worth more or fewer shares. Also called rebasing. (xStocks docs)

N

Native token

A token that is the security itself: the token balance is the official register of who owns it. (SEC staff statement)

Netting

Adding up all of a firm’s trades and settling only the difference. It cuts how much cash and stock must move, but needs a central party and time. (FSB 2024)

Related: Settlement & matching

NMS stock

A stock listed on a US national exchange and covered by Reg NMS, the rules that tie US stock markets together. (SEC Nasdaq approval)

Related: Reg NMS-inside model

No-action letter

A letter from SEC staff saying they will not recommend enforcement if a firm does a specific thing under stated conditions. It is not a rule change. (SEC DTC no-action letter)

Related: DTC tokenization pilot · Regulation

O

Onchain / offchain

Onchain means recorded and executed on the blockchain itself; offchain means handled in an ordinary system, such as a firm’s database or matching engine, and possibly settled onchain later. (BIS)

Opt-out (issuer objection)

Under the Innovation Exemption, a company’s right to stop a venue (TSV) from trading a third-party token of its stock. It has 30 calendar days from the venue’s notice to object, directly to that venue. Each objection covers only that venue; there is no blanket opt-out. (Nasdaq FAQ)

Related: Innovation Exemption · OKXICE TSV

Oracle

A service that feeds outside data into a blockchain so smart contracts can use it. For tokenized stocks that means a reference price plus market status (open, closed or halted), so a venue can stop trading when the primary market stops. (Chainlink)

P

Permissioned network

A blockchain where only approved operators run nodes and only approved parties join, unlike a public chain. Examples: Canton, and the Besu-based network DTCC uses for its Tokenization Service. (DTCC)

Permissioned pool

An AMM pool that only allowlisted wallets can trade in; a hook checks eligibility on every swap. It is the model the SEC’s Innovation Exemption covers for TSVs. (Uniswap)

Prefunding

Putting the full cash and the full securities in place before a trade, because atomic settlement leaves no time to borrow or net. It costs liquidity. (FSB 2024)

Related: Settlement & matching

Public, permissionless ledger

A blockchain anyone can read and send transactions to without asking permission. The Innovation Exemption requires TSV smart contracts to run on one but doesn’t define the term; Solana Policy Institute asks the SEC to judge it by who controls transaction ordering, validation and rule changes. (Solana Policy Institute)

Related: Innovation Exemption

R

Reconciliation

Regularly checking that two records agree, for example that tokens in circulation match the real shares held, or that the share register matches the chain. (SEC staff statement)

Redeem

To hand tokens back to the issuer in exchange for the underlying asset or its cash value. Usually limited to eligible holders or Authorized Participants. (Base docs)

Related: Legal structures

Reg NMS

Regulation National Market System: SEC rules that link US stock exchanges, including best-price and order-protection rules. (SEC Nasdaq approval)

Related: Reg NMS-inside model

Registrar

The firm or system that keeps the official list of who owns a security. In the US this is usually the transfer agent.

Repo

A repurchase agreement: a short-term loan where one side sells bonds and agrees to buy them back later at a slightly higher price. (Broadridge)

RFQ

Request for quote: you ask one or more dealers for a price and trade at the quote you accept, instead of using a public order book. (Robinhood)

Related: Settlement & matching

Rule 15c3-3

The SEC customer protection rule. It requires broker-dealers to keep customers’ securities in their possession or control and separate from the firm’s own. (SEC staff statement)

Related: Custody

RWA

Real-world asset: a traditional asset such as a bond, fund or stock represented as a token. (rwa.xyz)

S

Security entitlement

The legal right, under UCC Article 8, of someone who holds a security through a broker or custodian rather than directly on the company’s register. Securitize Stocks are security entitlements backed 1:1 by shares. (Securitize)

Related: Securitize · Legal structures

Settlement finality

The point at which a transfer can no longer be reversed and ownership has legally changed. (BIS)

Related: Settlement & matching

Slippage

The gap between the price you expect and the price you actually get, which grows when an order book is thin. Coinbase research flags it as higher for tokenized stocks than for the underlying shares, especially outside market hours. (Coinbase Institutional)

Smart contract

A program stored on a blockchain that runs automatically when its conditions are met, for example a swap that only completes if both sides pay. (IOSCO)

Related: Token primitives

Solana

A public blockchain known for fast, low-cost transactions. Its Token-2022 program supports compliance features. (Solana)

Related: Solana Token-2022 extensions

Soulbound token

A non-transferable token tied to one wallet, used as an access credential. OKXICE’s venue notice uses soulbound tokens to control who can trade. (OKXICE notice)

Related: OKXICE TSV

SPV

A special purpose vehicle: a company set up only to hold certain assets or issue certain securities, kept separate from its parent. (Ondo docs)

Stablecoin

A token designed to keep a steady value, usually one US dollar, backed by cash and short-term government debt. (WEF 2025)

Related: Settlement & matching

Street name

Holding shares through a broker, with DTC’s nominee Cede & Co. as the holder on the company’s register instead of the investor. (Securitize letter)

Synthetic wrapper

A token that is a separate security, such as a note or swap, that tracks a stock’s price. It may not be backed one-for-one by real shares. (SEC staff statement)

T

T+1

Trade date plus one business day: the current US settlement cycle for most stock trades. (FSB 2024)

Related: Settlement & matching

Token-2022

Solana’s newer token program, with add-ons such as transfer hooks and frozen-by-default accounts that support permissioned tokens. (Solana)

Related: Solana Token-2022 extensions

Tokenized deposit

A bank deposit represented as a token. It is a claim on a regulated bank, unlike a stablecoin. (WEF 2025)

Related: Settlement & matching

Transfer agent

The firm a company appoints to keep its official register of shareholders and record transfers. (IOSCO)

Related: Custody · Superstate Opening Bell · Vertalo

Transfer hook

Code that runs automatically on every token transfer, for example to check the receiving wallet is allowed. (Solana)

Related: Solana Token-2022 extensions

TSV

Tokenized Securities Venue: an onchain venue approved under the SEC’s Innovation Exemption to trade tokenized US stocks. (SEC order)

U

Unified ledger

A BIS proposal for one programmable platform holding tokenised central bank reserves, commercial bank money and government bonds, so payments and securities settle together. (BIS)

Uniswap v4 hooks

Add-on code that a Uniswap v4 pool calls before or after swaps; used to build permissioned pools that check an allowlist. (Uniswap)

W

Wallet

Software or hardware that holds the keys controlling tokens. A custodial wallet is run by a firm; a self-custody wallet is run by you.

Related: Custody

Wholesale CBDC

Central bank money in token form, used only between banks and financial firms for settlement, not by the public. (BIS)

Related: International regimes

Wrapper

A token that represents a share held by someone else, rather than being the share itself. See custodial wrapper and synthetic wrapper. (SEC staff statement)

Sources

Public originals for the facts on this page.

Ed’s Tokenized Securities Railshuman-curated, LLM-maintained

Explorer

Glossary

A

Admin keys

Allowlist

AMM (automated market maker)

Atomic settlement

ATS

Authorized Participant

B

B20

Bankruptcy-remote

Base

Broker-dealer

C

Canton

CIP-56

CCP

Cede & Co.

Compliance hook

Composability

Corporate action

CSD

CUSIP

Custodial wrapper

Custodian

D

Digital Securities Sandbox

Direct Registration System (DRS)

DLT

DLT Pilot Regime

DTC

DTCC

DWAC

DvP

E

Entitlement token

ERC-1400

ERC-20

ERC-3643

ETF

Ethereum

Exemptive relief

F

FINMA

FSRA (ADGM)

H

Halt

Hybrid matching

I

Identity registry

Innovation Exemption

Issuer-sponsored token

K

KYC

L

Layer 2

llms.txt

M

MiCA

MiFID II

Mint

Money market fund

Multiplier

N

Native token

Netting

NMS stock

No-action letter

O

Onchain / offchain

Opt-out (issuer objection)

Oracle

P

Permissioned network

Permissioned pool

Prefunding

Public, permissionless ledger

R