Ethereum’s ERC20 tokens to be used to tokenize and trade FANG and other stocks after hours
DX.Exchange, a community-based exchange has now made it possible to trade stocks such as Tesla, Apple, Facebook among others via tokenization using ERC20 tokens on the Ethereum network. The exchange announced that these services will be launched on January 7, 2019, and this will be the first time securities can be purchased with Bitcoin [BTC] and other cryptocurrencies.
This will test the virtual stock market among the users that were previously unequipped to buy the US-based stocks and also test these new waters. Another upside to the tokenization of stocks is that users can trade these stocks even after the actual markets close, and also buy portions of stocks, which was previously not possible.
The exchange’s CEO, Daniel Skowronski, said:
“We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”
Moreover, MPS Market Place will hold these stocks in a 1:1 peg against these physical assets, which is similar to the functionality of stablecoins, but they use stocks instead of fiat money as a peg.
The exchange has offices in Estonia and Israel and claims that it is fully regulated by the Estonian Financial Intelligence Unit and that they have full authorization to operate in the European Union. In addition, the exchange is said to be Nasdaq’s Matching Engine technology as reported by Bloomberg.
The exchange also confirmed on Twitter that DigiByte [DGB] will be a cryptocurrency that can be used to purchase the above-mentioned stocks. The exchange has to confirm if other cryptocurrencies such as XRP and BTC can be used.
Stephen Palley, a well-known person in the crypto-community and a lawyer, tweeted about the exchange saying:
“Yeah, I’m going to send money to an Estonian and Cypriot regulated exchange and get ERC-20 tokens that represent stocks but are not stocks and sure they’re not CFDs also do you sell guppies sounds tots legit what could go wrong”
In a subsequent tweet, he stated:
“Look, even if it is totally legit — hey it might be, what do I know — good luck getting your disputes resolved in Estonia if you’re, y’know, not in Estonia.”
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