Metavesco Proposes OTC Market Tokenization to Enhance Transparency and Liquidity

Metavesco, Inc. released a position paper titled "Tokenizing the OTC: A Vision for Transparency, Liquidity, and Growth," proposing a framework to bring over-the-counter equities on-chain through blockchain technology. The company argues that tokenization could solve persistent problems in OTC markets, including limited liquidity, toxic financing practices, and lack of transparency that have long hindered small public companies.

The white paper identifies several critical issues plaguing OTC markets. Most OTC tickers trade with minimal volume, creating a liquidity trap that leaves shareholders unable to exit positions and issuers struggling to raise growth capital. Convertible note lenders often prey on illiquid companies, flooding markets with cheap paper and using retail investors as exit liquidity. Market manipulation, naked shorting, and other schemes thrive due to limited visibility, while the absence of Wall Street research coverage leaves investors blind and undervalues promising businesses.

Metavesco's proposed solution involves tokenizing OTC equities to leverage blockchain technology's inherent advantages. Tokenized shares could trade across borders, unlocking global liquidity pools beyond traditional U.S. broker-dealers. The on-chain nature of transactions would provide complete transparency, making every trade, issuance, and wallet visible and eliminating practices like naked shorting and hidden dilution. Blockchain technology also offers lower costs for issuing dividends and other rewards to shareholders while opening new fundraising tools such as on-chain raises and smart contracts.

The company believes tokenization could significantly reduce dependence on toxic financing sources by providing alternative capital access methods. Additionally, the blockchain environment could foster community-driven analysis, turning the investing public into analysts through accessible on-chain metrics tracking. Metavesco, which maintains a Bitcoin and Ethereum treasury and operates mining infrastructure, positions itself as a champion for this transformation, advocating for regulatory frameworks that responsibly bring OTC securities on-chain.

Metavesco will participate in an SEC roundtable with Commissioner Hester Peirce on September 4, 2025, to discuss regulatory barriers and opportunities in the digital asset space, focusing specifically on tokenization as a path forward for OTC issuers and investors. The company views this initiative as necessary for creating transparent, fair, and global capital markets that better serve small public companies and their investors.