Here’s a stylized history of US public stock markets. In the olden days, anyone could raise money for a project by selling stock to the public, and lots of people did, often by making false promises. This crested in the 1920s, as people rushed to buy stocks and borrow money to juice their speculative bets. Then there was a crash and a Great Depression. To restore confidence in markets, Congress passed some laws — particularly the Securities Act of 1933 and the Exchange Act of 1934 — to regulate public stock markets. From now on, a company that wanted to sell stock to the general public had to explain its business and publish audited financial statements and disclose important events, so that public investors would know what was going on. Of course, this only applied to public companies, and there were exceptions for companies that did not raise money from the general public. If your father-in-law gave you some seed money to open a local hardware store, obviously the federal government did not require you to give him audited financial statements. Over time, these exceptions grew in importance. In the 1920s, the best way to raise a lot of money for a business was to sell your stock broadly, on the stock exchange, to thousands of individual investors who wanted to buy it.

Full commentary : As companies like SpaceX, Stripe, and OpenAI stay private longer, tokenized stocks on blockchains offer a way for the public to access lucrative private markets.