Nasdaq-Backed Exchange to Launch Trading of Tokenized Stocks
- A token-based platform will be released next week that will allow its clients to purchase tokenized stocks on the Ethereum blockchain, Bloomberg reported Jan. 3.
- The exchange will enable investors to trade in 10 NASDAQ listed companies, such as Facebook Inc., Apple Inc. and Tesla Inc.
A token-based platform will be released next week that will allow its clients to purchase tokenized stocks on the Ethereum blockchain, Bloomberg reported Jan. 3.
The exchange will enable investors to trade in 10 NASDAQ listed companies, such as Facebook Inc., Apple Inc. and Tesla Inc. The digital trading platform in question, DX.Exchange, will be the first to offer such trading in a fully regulated environment. The press release further reads:
“Digital stocks are backed 1:1 to real-world stocks traded on conventional stock exchanges. You purchase tokens for leading assets that you choose to invest in, such as Google, Amazon, etc. Therefore, when you are a token holder, you own shares of the company.”
These digital stocks will provide advantages over traditional shares as they could be traded even when regular exchanges are closed, and provide foreign investors with the ability to buy and sell U.S. shares that they sometimes have difficulty obtaining.
MPS MarketPlace Securities Ltd., which falls under the supervision of the Cyprus Securities and Exchange Commission, will be the one holding the stocks on behalf of the token owners. The shares will be kept in segregated account, separate from MPS internal funds.
The first shares that will be purchased at launch by MPS will be in Apple, Amazon, Facebook, Microsoft, Intel, Tesla, Netflix, Nvidia, AlphaBet, and Baidu. Even though it’s U.S. regulators who oversee the trading of these stocks, the CEO of DX said he does not need permission from them to offer these services as DX does not operate in the U.S.. The company claims to be licensed by the Estonian Financial Intelligence Unit (FIU) with full authorization to operate in the European Union.
The exchange will use NASDAQ’s matching engine to facilitate the trading of these digital securities, and protect against market manipulation. It will further use NASDAQ’s financial information exchange protocol (FIX), which is a standard used by varied options securities trading firms in the U.S.
- Stock market operator Nasdaq has formed a new digital asset division, which will develop and launch a digital asset custody services to institutional clients.
- The move is in line with Nasdaq’s mission to be a service provider in the crypto space, rather than facilitate trading of cryptocurrencies.
NASDAQ MarketSite location at Times Square, New York, September 9, 2016. andersphoto/Shutterstock
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