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| Blockchain is coming to US stock markets |
The first blockchain-based trading platform in the US received regulatory approval from the US Securities and Exchange Commission this week.
The SEC file on their website indicates that BSTX can take advantage of emerging technologies to enable faster trade settlements.
BSTX offers same-day and next-day settlement compared to traditional platforms which usually take two days to complete a transaction.
It also uses blockchain technology to provide market insights, allowing members to view their own and others' trades anonymously.
It does not provide members with the ability to trade digital tokens, which means that it is not a suitable place to buy and sell cryptocurrencies and other virtual assets.
BSTX CEO Jay Fraser told Reuters that the platform plans to list shares of the token for trading at a later date.
BSTX plans to focus on tokenized securities, but the SEC denied these plans in its initial filing.
However, Fraser said the goal is to create a cryptocurrency exchange that is more like Coinbase than anything like the Nasdaq or the New York Stock Exchange.
BSTX uses the blockchain to track transaction activity
Until then, BSTX will operate as a conventional platform if it is opened before the second half. It trades in stocks or funds.
BSTX aims to expand trading to include all US stocks and tokenized securities. An action code is a digital copy of an action associated with the underlying action.
Fraser said the platform plans to expand the use of blockchain technology to support products such as tokenized securities.
BSTX was originally known as the Boston Security Token Exchange. Only token stock trading is planned. But the Securities and Exchange Commission rejected the plan in December 2020.
The SEC said the revised rules for BSTX are very similar to those applied to other exchanges. Although blockchain is the core technology of cryptocurrencies like bitcoin and has faster settlement times.