Popular crypto derivatives exchange FTX is entering the space of tokenized equity trading, enabling its users to trade the world’s most popular stocks, Bloomberg reported on 29 October.
According to the publication, the new FTX offering comes in partnerships with tokenization firm Digital Assets AG and investment firm CM Equity. The exchange’s users will now have access to more than 12 equity and crypto pairs thanks to the firm’s “fractional stocks offerings”, which are tokens representing a fraction of high demand stocks like Tesla (TSLA), Apple (APPL) and Amazon (AMZN).
The CEO of FTX, Sam Bankman-Fried, noted that the new offering is aimed at investors who have trouble accessing traditional stocks. He said:
“These products demonstrate a powerful future, in which assets are digitized and traders have unlimited creative potential to express their beliefs about the markets.”
Each new token will represent only a fraction of a firm’s share, meaning FTX users will have the option of trading half a share, which would enable traders to speculate on expensive stocks with less capital. Not everyone on the platform will have access to the new offerings, with traders from the U.S. and other restricted jurisdictions being locked out from the exchange’s fractionalized equity products.
Users will have access to the new products only after they pass CM Equity’s KYC and compliance, as the firm will be the custodian of the shares that will back FTX’s new tokens. According to the exchange’s website, the tokens can also be used to redeem the underlying shares from CM Equity.
This is not the only new product released by FTX this week. On Wednesday, the exchange announced the launch of TixWix, a new product built in partnership with blockchain gaming platform Hxro, which targets retail customers in the world of options trading.