Nasdaq Stocks Now Possible On Blockchain
An exciting turn is coming to the world of cryptocurrency. That is because investors will be able to purchase tokenized shares from January 9th. And this would include some of the leading tech companies across the world.
The DX.Exchange Platform
This initiative is made possible by Estonian-based crypto exchange DX.Exchange and Nasdaq. The former can be used by investors to buy shares in Facebook, Tesla, and Apple, among many others. It is basically represented by an ERC-20 token, particularly on the ETH (Ethereum) blockchain.
So how does stocks on blockchain work? If users want to buy stock in Facebook, they just need to purchase the relevant token on the platform. The exchange’s partner, which is MPS MarketPlace Securities, will be responsible for purchasing the corresponding stock of the aforementioned tech firm. From there, it would issue an ERC-20 token to users.
The initiative was made official via a press release, which 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.”
It is also worth noting that all token holders are entitled to similar cash dividends, which is the same as real shareholders. The trading platform, in particular, will tap directly into Nasdaq’s SMART technology, which is responsible for monitoring any suspicious trading activity, manipulation, and exploitation.
There is a huge deal to tokenized shares. For starters, it would mean that users could easily purchase fractions of a share. If they do not like the idea of buying one whole share of, say, Tesla stock, they can always purchase a third of it through the upcoming tokenized platform.
This also means that users will be able to purchase stocks using Bitcoin, the world’s leading digital currency. This is simply because of the DX.Exchange, which is a crypto exchange, enabling users to purchase tokenized shares using the said cryptocurrency.
Above all, users can buy shares after-hours. It should be noted that regular stock market trading is restricted only to working hours. However, with tokenized shares, users can always buy stocks any time of the day, even if it is in the middle of the night.
According to DX.Exchange CEO Daniel Skowronksi, there is “a huge opportunity” in tokenizing all current securities. He believes that this will become the start of the traditional market’s merging with the blockchain technology.
“This is going to open a whole new world of trading securities old and new alike,” he said.