In a first-of-its-kind offering, Estonia-based Dx. Exchange - a regulated cryptocurrency trading platform - announced that it will soon tokenize stock trading on the blockchain platform. The new tokenized stock trading will be powered by NASDAQ’s Matching Engine Technology and will function in a completely regulated environment in the European Union.
Leveraging the Ethereum Blockchain Network for Tokenizing Stocks
The Dx. Exchange will leverage the Ethereum blockchain network and its ERC-20 protocol to tokenize stocks. The press release notes that crypto users will thus be able to purchase tokens backed by stocks of major public-listed companies like Facebook, Google and Amazon.
Furthermore, the digital tokens repenting the shares of the public listed companies shall be issued through smart contracts. The press release also notes that investors would be able to purchase these tokens 24x7 and even after the stock market hours in a “secure and compliant trading environment”. This will also provide a massive boost in the liquidity of the market. The press release notes:
“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.”
DX. Exchange CEO Daniel Skowronski expressed optimism over the launch of this new facility. “By tokenizing stocks of some of the biggest publicly traded companies like Google, Amazon, Facebook and more, DX is opening an untapped market of millions of old and new traders around the globe cutting out the middleman,” he said.
Skowronski further added that “The crypto community has been talking about tokenizing assets for well over a year now without much progress, so we think the impact will be huge. Tokenizing securities is the first true use case where crypto collides with the real world 24 hours a day, 7 days a week. With fractional ownership and no leverage like CFDs, these new digital stocks are a more sound and safer investment that traders can take home in their wallet. This is the future of securities not just new issues but all the thousands of listed securities around the globe.”