Digital Securities
DX.Exchange to Tokenize Publically Traded Securities
DX.Exchange goes Live
In a much anticipated announcement, DX.Exchange has released a launch date for their platform. Through a brief video clip on their YouTube channel, we now know that this date is January 7th, 2019.
When launched, the online exchange will offer services facilitating trading of both cryptocurrencies and various other types of tokens. Users will be able to take part through various gateways, including FIAT.
How are they different?
What makes this exchange unique is their approach to digital securities. DX is taking traditional stocks such as Facebook, Tesla, etc., and issuing tokens representing a share within those companies.
What is interesting is that those companies have zero involvement in the process. Some refer to this as ‘third party tokenization'.
The tokens representing shares within those companies function similar to ‘stablecoins’. In other words, this means that each token is backed on a 1:1 basis with the respective stock.
Essentially, DX will purchase the stocks through traditional means, and sell them to investors. They, however, will hold onto the stocks, and give investors their digital tokens representing ownership.
Token holders are still entitled to dividends etc., normally seen through traditional investments.
How will this affect Digital Securities?
This unique approach to offering investors access to securities through tokenization may have an interesting effect on the market. With many companies racing to develop security token standards, and platforms to facilitate STOs, is it really needed?
While DX.Exchange is concentrating on publically listed companies for now, will this expand in the future?
If so, why would a company release their own tailored security token when they can allow the issuance process to be handled by a third party?
Time will tell.
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The upcoming exchange will be able to offer other unique features, such as after-hours trading. As a result, investors will be able to trade publicly listed companies 24/7.
Such services are made possible through the utilization of technology from NASDAQ, known as their ‘Matching Engine’.
DX.Exchange
DX.Exchange is based out of Estonia, and was founded in 2018. Above all, the company acts as an online exchange, providing investors access to a variety of assets.
They maintain multiple operating licences with the Estonian Financial Intelligence Unit. Where and how they operate, means that they do not fall within the purview of the SEC.
In a recent discussion with Bloomberg, Daniel Skowronski, CEO of DX, commented on the development. He stated, “We saw a huge market opportunity in tokenizing existing securities…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.”
In their press release, Skowronski commented on the scope of the endeavour. He stated, “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.”
