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Morning Minute: Tokenized Stock Venues Are Launching Without Big Tech’s Approval
In this news:
Key takeaways
- OKXICE is launching a tokenized stock venue on November 23 despite 67 corporate objections.
- The venue will list over 70 assets, focusing heavily on crypto companies and leveraged ETFs.
- Crypto major assets and Bitcoin prices continued their downward slide during morning trading.
OKX's Tokenized Stock Venue Launches Without Big Tech
In September, after the CLARITY Act died in the Senate, the SEC created an innovation exemption letting venues trade tokenized versions of US stocks without waiting for new legislation. It came with one condition. A company that doesn’t want a third party minting tokens of its shares can object in writing within 30 days, and that’s the end of it.
Companies have been objecting ever since. The count at the OKXICE venue went from 22 in October to 50, then 56, and as of its November 5 notice, 67. Every member of the Magnificent Seven is on that list.
OKXICE is launching anyway, on November 23. The venue will list more than 70 assets, though 59 of them are Direxion ETFs. The individual stocks that made it through are Coinbase, Circle, Robinhood, Strategy, BitGo, Securitize and Better.com. Strategy is also tokenizing its preferred shares.
Securitize handles the tokenization, each token is backed one-for-one by a real share and carries dividends and voting rights, and trading runs through Uniswap v4 pools on X Layer, OKX’s Ethereum layer-2.
So a venture between a global exchange and the parent of the New York Stock Exchange built a tokenized equities market, and what it opens with is seven crypto companies and a series of leveraged ETFs.
Notably, this news comes just a day after the NYSE picked Avalanche to handle clearing and settlement for its own 24/7 tokenized securities platform, with a fourth-quarter target for launch after about a year of testing. The NYSE has signed agreements with Broadridge, Computershare, Equiniti and Superstate to support issuer-sponsored tokenized securities and transfer-agent functions. When the company’s own share registry issues the token, there is nothing to veto.
DTCC is doing a version of this too, with a tokenization service that went live October 28 on the Canton Network carrying 20 participants including Bank of America, Citi, JPMorgan and Citadel Securities. Morgan Stanley has already run equities and Treasuries through it.
Progress is being made, slowly but surely. It just gets built slowly, through transfer agents and clearing houses, by the incumbents. Now we wait to see how the market reacts to these first launches…
Source: decrypt.co
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