Estonia-based Crypto Exchange To Enable Trading of Nasdaq-Listed Companies

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Estonia-based Crypto Exchange To Enable Trading of Nasdaq-Listed Companies

According to a report, a crypto start-up powered by Nasdaq is planning to introduce a token exchange system for its clients interested in buying shares of major companies. The Estonia-based DX.Exchange issued a statement on 3rd January 2019 detailing its plans to launch the trading platform on 7th January 2019 i.e. Monday. The platform will allow the customers of the company to buy crypto tokens representing shares in various tech companies that are listed on the Nasdaq exchange. The platform will allow the clients to buy the tokens both through fiat currencies and cryptocurrencies.

According to the company’s statement, it will deploy the matching system of Nasdaq to allow the trade of digital securities and to ensure safety against market volatility. Commenting on the latest happening, COO Amedeo Moscato said that the clients of DX.Exchange would buy tokens representing shares in a company rather than buying the shares directly, reports CoinDesk.

This implies that on the purchase of the token the clients will own certain portion or stocks of the firm’s stock as the token would be supported by 1:1 to the real-world stocks. The token holders will be entitled to cash dividends just like a shareholder of the company.

For the token system, DX.Exchange has signed an agreement with MPS Marketplace Securities Ltd. Under the agreement, MPS will buy the real-world stocks as per the demand of the clients and generate ERC-20 tokens to represent each share. The stocks or shares thus bought will be safely stored in a segregated account which would be separate from any of MPS’ usage or internal funds. The latest development is in line with the company’s plans to protect against certain issues like bankruptcy, as noted by the COO.

The agreement requires MPS and DX.Exchange to abide by the rules of the Cyprus Securities and Exchange Commission as well of European Union regulations and authorities, respectively. MPS have previously claimed its plans to buy shares in bug firms including, Apple, Microsoft Corporation, Netflix, Intel Corporation, Facebook, AlphaBet, Tesla, Nvidia, and Baidu.

Besides the matching engine of Nasdaq, the platform will use the financial information exchange (FIX) protocol of Nasdaq. The FIX protocol is a standard used by various options securities trading companies in the US. The protocol defines the method by which electronic messages should be exchanged between the two parties conducting securities transactions.

The tokenization of the shares will allow investors to better trade in the shares even after the traditional market hours. The traders will have the option to buy event fractions of shares. The tokenization will also enable the foreign investors to buy and sell US shares. In short, the move from traditional trading to digital or tokenized trading will provide the investor a wider window to invest.

In separate news, DX.Exchange is reported of collaborating with Bloomberg. Under the collaboration, the platform will back-up the crypto center of the Bloomberg. DX.Exchange will offer a range of services including its stock services and peer-to-peer crypto trading. No further details on the agreement were revealed by the companies.