Token Exchange to Enable Trading of Nasdaq-Listed Companies

A Nasdaq-powered crypto startup plans to let its clients indirectly purchase shares of major firms through a token-based platform.

Estonia-based DX.Exchange announced Thursday that it would launch its trading platform on Jan. 7, allowing its clients to purchase crypto tokens representing shares in different tech firms listed on the Nasdaq exchange. Customers will be able to use select cryptocurrencies, as well as fiat currencies to purchase the tokens.

The company will use Nasdaq’s matching engine to facilitate the trading of digital securities, as well as protect against market manipulation. DX.Exchange customers will not be purchasing ownership of shares directly, but rather, will purchase tokens which represent shares in a company, COO Amedeo Moscato told CoinDesk.

“Henceforth, when they become a token holder, they own stocks or portions of the company’s stock, as the tokens are backed 1:1 to the real-world stocks. That makes them entitled to the same cash dividends that the stocks are worth,” he explained.

MPS Marketplace Securities, Ltd, which DX.Exchange has an agreement with, will purchase the real-world stocks based on customer demand, and generate ERC-20 tokens to represent each share.

The actual shares themselves would be stored in a segregated account separate from any of MPS’ internal funds or usage. This is intended to act as a safeguard against the company having issues or filing for bankruptcy, he explained.

Moreover, MPS will fall under the supervision of the Cyprus Securities and Exchange Commission, while DX.Exchange will abide by European Union regulations and authorities.

At launch, MPS said it will purchase shares in AlphaBet, Apple, Amazon.com, Facebook, Microsoft Corporation, Tesla, Netflix, Baidu, Intel Corporation and Nvidia.

In addition to the matching engine, the platform is using Nasdaq’s financial information exchange (FIX) protocol, which is a standard used by a number of options securities trading firms in the U.S. The protocol defines electronic message exchanges for two parties conducting securities transactions.

DX.Exchange is also partnering with Bloomberg, with the platform powering Bloomberg’s crypto center in turn.

In addition to its stock services, DX.Exchange will offer peer-to-peer crypto trading.

Nasdaq image via oleschwander / Shutterstock