Crypto start-up to launch tokenised stock trading next week

An Estonia-based crypto start-up plans to launch tokenised stocks next week, according to media reports.

DX.Exchange, which is reportedly licensed by the Estonian Financial Intelligence Unit with full authorisation to operate in the European Union, announced earlier today plans to launch a trading platform that would allow customers to buy crypto tokens representing shares in a number of Nasdaq-listed companies. The tokens will be purchasable with crypto, as well as fiat currencies. The trading platform will be powered by Nasdaq’s Financial Information exchange (FIX) protocol and will also use the US technology-focused exchange’s matching engine.

Commenting on the upcoming product, DX.Exchange’s chief operational officer Amedeo Moscato clarified that customers would not be purchasing ownership of shares directly, but tokens representing shares in a company.

“Henceforth, when they become a token holder, they own stocks or portions of the company’s stock, as the tokens are backed 1:1 to the real-world stocks,” Moscato told Coindesk. “That makes them entitled to the same cash dividends that the stocks are worth,” he added.

DX.Exchange has struck a partnership with MPS Marketplace Securities, which will buy the real-world stocks based on customer demand and then generate the tokens representing each share using Ethereum’s ERC-20 protocol. The shares will be stored in a segregated account separate from any of MPS’ internal funds or usage.

Initially, MPS will purchase stocks in 10 Nasdaq-listed companies: AlphaBet, Apple, Amazon.com, Facebook, Microsoft Corporation, Tesla, Netflix, Baidu, Intel Corporation and Nvidia.

In an email interview with Bloomberg, DX.Exchange’s chief executive officer Daniel Skowronski talked about the company’s rationale for the move.

“We saw a huge market opportunity in tokenizing existing securities,” Skowronski told the newswire. “We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”

The new service is scheduled to launch on Monday, January 7. According to Bloomberg, DX.Exchange has plans to expand the service to expand to the New York Stock Exchange as well as in Tokyo and Hong Kong in the future.