America’s first blockchain-based equity platform this week received regulatory approval from the US Securities and Exchange Commission.
In a filing that was uploaded to its website by the Securities and Exchange Commission at a time, it said BSTX could use emerging technology to offer faster trade settlements.
Compared to traditional platforms where it usually takes two days to settle a deal, BSTX offers same-day and next-day settlements.
It also uses blockchain technology to provide a market feed that allows members to see their own trades, as well as those of others, on an anonymous basis.
What it won’t offer members is the option to trade digital tokens, which means it’s not a convenient place to buy and sell cryptocurrencies and other virtual assets.
Jay Fraser, director of BSTX, told Reuters that the platform plans to allow the trading of shares of the token at a later date.
BSTX planned to focus exclusively on securities with tokens, but the SEC rejected those plans in the pre-deposit.
However, Fraser said the goal is to create a platform that looks more like a cryptocurrency exchange like Coinbase than something like the Nasdaq or the New York Stock Exchange.
BSTX uses blockchain to track trading activity
Until then, BSTX is operating like a traditional platform when it opens before the second half of the year. It trades in stocks or funds.
BSTX aims to extend trading to all US stocks and tokenized securities. Stock tokens are digital versions of stocks that are tied to the underlying stock.
Fraser said the platform plans to expand its use of blockchain technology to support products such as securities with tokens.
BSTX was originally to be called the Boston Security Token Exchange. She was planning to trade exclusively in tokenized securities. But the US Securities and Exchange Commission rejected this plan in December of 2020.
The SEC said the revised BSTX rules were broadly similar to those of other stock platforms. This is despite fueling blockchain, the technology that underpins cryptocurrencies like Bitcoin, and faster settlement times.
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