on the crypto
One of the leading cryptocurrency exchanges by trading volume, FTX, is partnering with European financial firms CM Equity AG and Digital Assets AG to enable tokenized stock trading.
Users of the platform will have access to the best tickers on the market, including Apple shares (AAPL), Amazon (AMZN) and Tesla (TSLA), along with the most popular indices, such as the S & P500. The United States, along with other limited jurisdictions (such as Cuba), will not have access to the offer.
A stone in the shoe for the United States
With a trading volume of approximately $ 1,5 billion, the FTX exchange is the sixth most popular trading venue in the industry, attracting a large audience of traders. However, this demographic group had a hard time accessing the traditional stock market, according to the company's CEO, Sam Bankman-Fried.
In particular, much of FTX's user base comes from China, which could be of interest to US regulators, given the ongoing political friction. CM Equity AG will hold the traded shares, while the tokens will function as depository receipts or ETFs.
If a trader wishes to hold actual stock, he will need to do so through CM Equity AG. “CM-Equity guards the shares. The tokens on it are then traded on FTX and are redeemable based on the underlying shares… CM-Equity is a licensed company and operates in compliance on all clients and transactions involved ”, said the CEO of FTX.
Tokenized securities allow for fractional ownership
An important advantage of tokenized securities is that the platform allows for fractional ownership. This allows retail traders to make smaller deposits, buying fractions of popular US stocks like Amazon and Apple - just like with platforms like Robinhood (in the US) and Revolut (in Europe) - with one big difference: you can trade not with fiat currencies, but cryptocurrencies. Also, traders will not have to pay for custody.
Bankman-Fried said in an interview: “These fractional equity products reflect the reality that today's traders move across multiple sectors and want trading opportunities that fully match their interests and mindset.
This new service will be offered with the support of two partner companies: Switzerland-based Digital Assets AG (DAAG), which helps its clients implement tokenized financial products) and Germany-based cryptocurrency management company CM-Equity AG ". FTX will only charge trading fees.
A significant step forward for the credibility of the crypto space
The merger of cryptocurrencies and traditional markets has been at the heart of many startups in the space. For example, the decentralized derivatives platform Synthetix provides access to traditional stocks such as the NIKKEI and FTSE indices.
However, unlike FTX, the platform does not provide ownership of the underlying assets. While the FTX offering does present some regulatory risks, it is a significant step in building the credibility of the crypto space.
