Republic, an investment platform, is reportedly planning to tokenize shares of private companies like Elon Musk’s SpaceX and OpenAI, according to a Wall Street Journal report. This move is aimed at enhancing retail investor’s access to private companies.
As per the report, Republic is set to acquire SpaceX shares and generate a blockchain-based equivalent that mirrors these holdings. Apart from SpaceX, the platform also aims to launch digital tokens that will track the performance of private artificial intelligence companies, OpenAI and Anthropic.
The aspiration to transition traditional equities markets onto the blockchain has been a long-term goal of the crypto industry, but has been hindered by regulatory uncertainties. Although Republic’s token holders will not be considered shareholders or have direct access to these private shares, these blockchain-backed assets will offer retail investors a chance to invest in otherwise inaccessible opportunities.
Republic asserts that it can issue these tokens due to clauses in the 2012 Jumpstart Our Business Startups (JOBS) Act. This allows US-based firms to raise up to $5 million annually from retail investors by issuing securities, as per WSJ sources.
Investors will be able to purchase these digital assets in amounts ranging from $50 to $5,000, significantly lower than the usual $10,000 or $100,000 minimum required to invest in a private company. After a year, token holders will also have the option to exchange them on the crypto trading platform INX. In April, Republic agreed to acquire INX Digital for up to $60 million to strengthen its real-world asset, security token, and other crypto investment services, as previously reported by The Block.
While it remains uncertain if SpaceX will oppose the tokenization of its shares, it should be noted that the space company has embraced cryptocurrency in the past. In 2021, Elon Musk announced that SpaceX had acquired bitcoin, making it one of the early adopters of cryptocurrency. As of June 25, SpaceX holds 8,285 BTC valued at about $894.46 million, according to Arkham.
The Block has reached out to Republic for confirmation and further comments.Disclaimer: The Block operates independently to provide objective, impactful, and timely information about the crypto industry.
