Cryptocurrency holders who look for ways to diversify their portfolios into other markets are about to get a new option for doing so. A regulated European platform, DX Exchange, is set to offer investing in stocks using popular cryptocurrencies.
Trade Tokenized Stocks With Crypto
Estonia-based venue DX Exchange is set to launch trading on the tokenized stocks of some of the biggest public companies in the world, such as Google, Facebook and Amazon, on Jan. 7, 2019. And it accepts deposits in BCH, BTC, ETH, USDT, DASH, LTC, XRP and a few other cryptocurrencies as well as traditional fiat payment options.
This has been achieved through an agreement with MPS Marketplace Securities Ltd, which issues tokens that represent stocks via smart contracts and buys and holds the real world stocks according to demand on the platform. The “digital stocks” are said to be backed 1:1 with the real-world stocks traded on conventional stock exchanges, like stablecoins backed by equities rather than fiat. Unlike traditional stock exchanges, this arrangement allows the platform to offer its users the ability to trade on stocks 24/7.
The regulated platform operates in full compliance with Mifid II (the latest EU financial regulations) which means it features a robust AML/KYC process.
International Financial Venture
DX Exchange holds operating licenses from the Estonian Financial Intelligence Unit and reportedly employs over 70 developers in an R&D center in Israel. It is backed by NFX, a seed and series A focused venture capital firm based in San Francisco. Its partner, MPS Marketplace Securities Ltd. (previously named Spotoption Exchange Ltd) is a Cyprus licensed financial company which provides liquidity solutions for the online trading market.
The technology is built on Nasdaq’s Financial Information exchange (FIX), a vendor-neutral standard message protocol that defines an electronic message exchange for communicating securities transactions between two parties. The platform also supports trading via an API, which means it can be easily integrated with market makers, liquidity providers, algo traders, and hedge funds.
Is investing in tokenized stocks likely to be a popular service with crypto holders? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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