Dx. Exchange to offer tokenized securities on its platform
One Nasdaq-powered crypto startup has some plans to let its clients indirectly buy shares of major crypto firms through a token-based platform. Dx. Exchange, which is a European Union-regulated and Estonia-based crypto exchange, announced on Thursday that it is prepared to offer tokenized securities on its platform, which means that it would launch its trading platform on the 7th of January, 2019, and in that way allow its clients to buy tokens symbolizing shares in different tech firms which were listed on the Nasdaq exchange. Users will have the possibility to select different cryptos and also fiat currencies to buy the tokens.
According to one press release, some companies included in this would be the parent company of Google, Alphabet, as well as Facebook and Amazon. These are the first securities to be tokenized, as well as traded as ERC20 tokens on the Ethereum blockchain.
The company is going to use the matching engine of Nasdaq in order to facilitate the trading of digital securities and protect against market manipulation. The customers of the exchange are not going to purchase ownership of shares directly, but rather, they will purchase tokens that represent shares in a company, according to the COO named Amedeo Moscato.
The tokens are actually backed 1:1 by real stocks which are issued by MPS Marketplace Securities, Ltd, which is a firm with which DX. Exchange has an agreement with to bring tokenized securities to its platform, and which is going to buy the real-world stocks based on customer demand, as well as generate ERC20 tokens to represent each of the shares.
MPS purchasing shares in different companies
Token holders are going to own shares of a specific company. The token which represents these shares, which is going to be from some leading public companies listed on the biggest stock exchanges in the world, is going to be issued by smart contract.
The exact shares would be stored in some segregated accounts separate from any of the initial funds or usage of MPS. This is designed to function as a safeguard against the company having problems or also filing for bankruptcy.
Furthermore, MPS is going to fall under the supervision of the Cyprus Securities and Exchange Commission, while DX. Exchange is going abide by EU regulations, as well as authorities.
At launch time, MPS said that it is going to buy shares in Alphabet, Amazon.com, Apple, Microsoft Corporation, Facebook, Tesla, Baidu, Netflix, Inter Corporation, as well as Nvidia.
More about the project backed by NFX and Bloomberg
In addition to the matching engine of Nasdaq, which is supporting the project, the platform is also said to be using the financial information exchange or FIX protocol of Nasdaq, which is a standard used by many options securities trading firms in the United States. The protocol actually defines electronic message exchanges from two parties conducting securities transactions.
The project is also said to be used in over 70 markets. It permits high-frequency traders to utilize the platform at will. DX. Exchange is backed by NFX too, which invested in and is advising the firm, and also by Bloomberg, as DX is the sponsor of Bloomberg when it comes to cryptocurrencies.
Lastly, it is worth to note that Nasdaq, which is the second largest stock exchange in the world, has had some plans to launch Bitcoin futures contracts, despite the critical drop of the cryptocurrencies during 2018.