A crypto startup powered by Nasdaq is planning to set up a token-based platform where customers can indirectly purchase shares of major firms.
DX.Exchange, which is based in Estonia, said that it would launch its new trading platform on January 7. This platform allows customers to buy crypto tokens that represent different shares of tech firms on Nasdaq exchange list. Clients will have the option to choose cryptocurrency or fiat to buy the tokens.
The platform will utilize the matching engine of Nasdaq to allow trading of digital securities and avoid market manipulation. DX.Exchange COO Amedeo Moscato clarified that clients will not be buying shares and have ownership directly, but instead, customers will buy tokens that represent specific company shares.
“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,” Moscato said.
The DX.Exchange has partnered with MPS Marketplace Securities, Ltd to buy the actual stocks based on the demand of customers and provide ERC-20 tokens that represent each share.
The actual shares will be placed in an exclusive account independent of any MPS’ internal funds. This is to protect the company from issues arising in case of bankruptcy.
Furthermore, the DX.Exchange will be under the jurisdiction of the European Union while the MPS will abide by the rules and regulation of Cyprus Securities and Exchange Commission.
During the launching, MPS told the public that it will buy shares in Apple, AlphaBet, Facebook, Amazon.com, Tesla, Microsoft Corporation, Netflix, Intel Corporation, Baidu, and Nvidia.
Aside from the matching engine, the platform is utilizing the financial information exchange (FIX) protocol of Nasdaq, which is also used by other options and securities trading firms in the United States. The protocol has the capability to define electronic message between two parties involved in transaction of securities.
DX.Exchange will also partner with Bloomberg, in exchange for providing data for Bloomberg’s crypto center.
Finally, aside from the stock services, DX. Exchange will also provide peer-to-peer crypto trading.