OKX and ICE plan 24/7 blockchain market for 60-plus tokenized U.S. stocks

OKX, a crypto exchange, and Intercontinental Exchange, the company that owns the New York Stock Exchange, have filed papers to launch a market where more than 60 U.S. stocks would trade 24 hours a day, seven days a week on a blockchain. The filing was submitted by their joint venture, called OKXICE, and it names Nvidia, Tesla, Apple, Microsoft, Amazon and Alphabet among the stocks it plans to offer in tokenized form.

The project has not launched yet. The filing is a request for permission to begin trading, and it says companies can object to having their shares included during a 30-day window.

What the filing lists

• More than 60 U.S. securities, including Nvidia, Tesla, Apple, Microsoft, Amazon and Alphabet.
• Crypto-linked companies such as Coinbase, Circle, Robinhood, Strategy and Securitize.
• Large non-crypto names including JPMorgan, Goldman Sachs, Walmart, Netflix, Reddit and Boeing.
• Each token would be backed one-for-one by a real share held by a registered broker-dealer.
• Trades would be settled in stablecoins, which are digital dollars designed to hold a fixed value, through pools of liquidity on the blockchain instead of a traditional order book.

What the regulatory filing says about the tokens

Tokenization, in simple terms, means representing something like a stock as a digital token that can be bought and sold on a blockchain, which is a shared computer network that records transactions.

The filing states that the underlying stock would be held by a registered broker-dealer on a one-for-one basis. One Nvidia token, for example, would be backed by one Nvidia share. According to the filing, token holders would also receive the economic and shareholder rights attached to the stock, including dividends and voting rights.

Trades would use stablecoins and onchain liquidity pools

Investors would not pay in dollars. Instead, they would buy and sell the tokenized stocks with stablecoins. According to the report, the new venue would use blockchain-based liquidity pools, which are sets of funds on the network that traders swap against, rather than a traditional order book of posted buy and sell orders.

One research firm warns not to expect the full list

TD Securities analysts wrote in a report published Monday that "no symbol is a given," meaning being named in the filing does not ensure a stock will actually be listed. The report notes that companies can push back during the objection window. Cerebras, for example, objected to the inclusion of its stock, according to the filing.

What is still unclear

• Being listed in the filing does not confirm a stock will trade. Cerebras has already objected.
• The report flags liquidity concerns, meaning thin trading activity could make it hard to buy or sell some tokens in size.
• The report also raises the question of temporary regulatory relief. Any permission that allows this style of trading may be limited in time.
• CoinDesk's summary of the filing describes the platform as a test of demand for round-the-clock U.S. stock trading, rather than a full replacement for existing venues.

Why this matters

If it proceeds, the market would let people trade well-known U.S. stocks around the clock using stablecoins and blockchain systems instead of the traditional stock market's order books. The filing also gives token holders the same dividend and voting rights as ordinary shareholders, which separates this model from earlier experiments with synthetic tokens that only tracked a price.

What happens next

The filing sets out a 30-day window in which companies can object to the inclusion of their shares. Cerebras has already used that process. Until the objections process ends and the market is cleared to open, none of the listed stocks are trading on the platform.

Sources

• CoinDesk

Read also: OKX and NYSE Parent File With SEC for Tokenized Stock Trading