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Cryptocurrency exchange FTX has ventured into the space of tokenized equity trading.
The exchange will now let users buy fractions of shares such as Tesla, Amazon, and Apple. Fractional stock trading allows buying less than one share, and it is particularly useful for high-cost stocks.
FTX has partnered with German financial services firm CM-Equity, and Switzerland-based tokenization solutions provider Digital Assets AG (DAAG), for the new 24/7 offering that is going live next week.
Cryptocurrency exchange FTX is expanding vertically and it has now explored the space of tokenized equity trading. FTX is a cryptocurrency exchange built by traders and traders. The exchange offers innovative products that include industry-first derivatives, options, volatility products, and leveraged tokens. It has always worked towards developing a robust platform that is intuitive for even first-time users.
And now it is venturing into the space of tokenized equity trading which will enable its users to buy fractions of shares such as Tesla, Amazon, and Apple. With the growing adoption of Blockchain, businesses are finding it extremely convenient to adapt to the digitized crypto-version of equity shares. It is emerging as a convenient way to raise capital wherein business issues shares in the form of digital assets such as crypto coins or tokens.
Tokenization of equity has become highly popular with the decentralized blockchain systems which allow for easy and affordable creation, issuance, and transfer of digital tokens. For the same, FTX has partnered with a German financial services company called CM-Equity and Digital Assets AG (DAAG), a Switzerland-based tokenization solutions provider. The new offering will go live next week and will operate 24/7.
The CEO of FTX Sam Bankman-Fried said that many users and traders have been asking for such a stock trading feature for a long time now and its collaboration with these companies has enabled FTX to provide the new product.
“CM-Equity custodies the stocks. Tokens on them are then traded on FTX and are redeemable for the underlying stocks,” said Bankman-Fried. “CM-Equity is a licensed entity and conducts compliance on all of the participating customers and trades.”
DAAG also played a crucial role in putting the partnership together. It has aided in tokenizing the financial products of its clients as per the claims on its website. The equity trading offering of FTX will not be available in the US and other restricted jurisdictions such as Iran, Syria, and North Korea.
For all the FTX products, the exchange does not onboard corporate accounts of entities that are located in, are established in, or reside in the United States of America, Cuba, Crimea and Sevastopol, Iran, Syria, or North Korea. It also does not onboard corporate accounts which are located in or are resident of Antigua or Barbuda. It also does not onboard personal accounts of current residents of the United States of America, Crimea, Iran, North Korea, Antigua, and Barbuda. In the general cryptocurrency market, companies like Uphold and Robinhood are also offering fractional stock trading among other companies.