Tesla Stock on a Blockchain allows investors to trade in USA stock market shares

[bitmover]

Tesla Stock on a Blockchain Offers Hint of Where Crypto's Headed

A digital exchange opening next week will enable investors to trade in companies including Apple Inc., Facebook Inc. and Tesla Inc. outside of the U.S. even when the stock markets are closed.

DX.Exchange, which has offices in Estonia and Israel, will offer digital tokens based on share of 10 Nasdaq-listed companies with plans to expand to the New York Stock Exchange as well as in Tokyo and Hong Kong. Each digital security is backed by one regular share and holders will be entitled to the same cash dividends, even though the companies themselves aren’t involved.


The exchange’s virtual stock offering will provide a test of investor appetite for products that seek to improve upon mainstream financial markets by using technology from the world of cryptocurrencies. DX will offer digital stocks, or tokens, based on actual shares bought and held by partner MPS MarketPlace Securities Ltd. The tokens will be based on the Ethereum network, with the amount corresponding to demand on the DX exchange.

https://www.bloomberg.com/news/articles/2019-01-03/tesla-stock-on-a-blockchain-offers-hint-of-where-crypto-s-headed

Soon it will be possible to buy stock with crypto. A crypto supposedly backed up by real shares of real companies.

To me, this will be completely chaotic. But it may be the future. Stock market will never close again. People will be negotiating and trading in the evening. No need to wait for NASDAQ or NYSE open again.

On the other hand, Tether is already mess, nobody knows if they are really backed up by USD. Will this crypto be really backed up by shares? What ´s the solution for that? Intensive regulations?

I think this is a dangerous, but inevitable path for cryptocurrencies.

[dothebeats]

This will just cause another round of pumping for stocks that are using the said platform IMO, and might lead to a harder crash should the market feels that it's just a way for these companies to pump their assets hard. Traditional stock markets are branching out, and saw a potential in blockchain platforms and are now using the said hype to further their realm and reach which IMO is bad for cryptocurrencies in general. These guys are NOT supporting the existing cryptocurrencies but will create their own for their private purposes.

[hatshepsut93]

Even though U.S. regulators oversee trading of DX’s initial roster of stocks, Chief Executive Officer Daniel Skowronski said he doesn’t need permission from the Americans to offer this service because DX doesn’t operate there.

I doubt that the SEC is happy about it, and they will sooner or later find a way to shut it down, even though it's outside of the US and supposedly decentralized. And overall it resembles stablecoins - you can't put some item on blockchain without having a trusted third party, so this blockchain exchange will probably suffer from the similar problems that surround stablecoins.

Also, how investors are going to receive their dividends?

[1Referee]

Everything that's announced like this will turn out to be a big disappointment. It's going to be a real struggle to get around how regulated the stock market is, and how you can't just launch something and expect that it will be left alone by regulators. Stating that you don't have to ask for permission since you don't offer your services in the US doesn't make you any more credible or sustainable.

I rather buy the actual stock through my bank which acts as broker than using something that exposes me to an unkown form of counterparty risk.

[masterzino]

SEC won't be happy
It's very easy to shut down the blockchain company. Or at least to cut their access to stocks.

They are trying to swim with a big fishes:

https://en.wikipedia.org/wiki/Cede_and_Company

"Cede technically owns substantially all of the publicly issued stock in the United States.[2] Thus, investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede."

[Crypdon]

Sounds like a big deal if they can pull it off. Stock traders are just as bad as crypto traders, they would love to be able to trade 24/7. Crypto doesn't sleep, it doesn't shutdown, this could be a win win situation for everyone

[figmentofmyass]

i wonder if the SEC will take kindly to this exchange offering american stocks without registering as a national exchange or obtaining permission from the SEC. DX says they don't need permission because they won't serve USA residents.

can't tell from the wording of sections 5 and 6 of the securities exchange act whether they're right. but 1broker was just shut down for this behavior, so hopefully their legal counsel knows what they're doing!

[dodgrad]

Everything that's announced like this will turn out to be a big disappointment. It's going to be a real struggle to get around how regulated the stock market is, and how you can't just launch something and expect that it will be left alone by regulators. Stating that you don't have to ask for permission since you don't offer your services in the US doesn't make you any more credible or sustainable.

I rather buy the actual stock through my bank which acts as broker than using something that exposes me to an unkown form of counterparty risk.

Also, I think it's too early to be happy that Wall Street sharks are pumping cryptocurrency market. SEC will never allow anyone to do such actions behind their backs. In a while, they will block it with some regulation and this will be the end.

[countryfree]

I don't understand how it could work. What if you want to buy a share when the market is closed? Do they have shares from all listed companies? I guess they will just take your order, and then wait for the market to open to process it. And what happens if the price of share jumps (up or down) right after the market opens?

[figmentofmyass]

I don't understand how it could work. What if you want to buy a share when the market is closed? Do they have shares from all listed companies? I guess they will just take your order, and then wait for the market to open to process it. And what happens if the price of share jumps (up or down) right after the market opens?

obviously that would expose them to unnecessary market risk so i doubt they'll take orders they can't immediately execute.

i think it'll be like ordinary after-hours trading in the conventional markets. there will be limited available liquidity based on shares already under the broker's control. i doubt they'll broker after-hour trades where they don't already control the shares:

DX will offer digital stocks, or tokens, based on actual shares bought and held by partner MPS MarketPlace Securities Ltd.

[mriansa]

if large companies such as Apple, Facebook and several other large companies start receiving investment in the form of cryptocurrecny, this seems to provide good news about the price movements of bitcoin and several other cryptocurrency because this will make prices go up because demand will definitely be higher because many use cryptocurrency to exchange.

[coinplus]

I do not understand what this is, the news says exchange will be offering virtual stocks but is it like we actually own the stock or not ?

If we own the stock that means we are capable of paying crypto and getting stocks of american (and in the future Tokyo and Hong Kong as well) which is AMAZING news, however if we do not own the stocks than what does it mean ? What do we get ? Is it because they are based on blockchain but only accept fiat currency for the purchases ?

Maybe that could be a step in the right direction considering the current system is not really working towards a cleaner data (each day gets more loaded) and blockchain could help them a lot however how can someone use blockchain for their system and not offer crypto purchases, that is a bit sad and upsetting, I hope they start doing that too.

[Indamuck]

This sounds great for Ethereum, tokenized stocks on the Eth network is going to make the price rise a lot faster than bitcoin.  Elon Musk has always been an innovative idea so this doesn't surprise me much.

The only concern I have is how they will handle lost tokens and stolen stock tokens.  It's not like someone can steal a regular stock easily but they can with crypto.

[stompix]

Wow, a company based in Estonia with a partner based in Cyprus is planning to let you trade tokens backed by real shares of the top 10 Nasdaq companies.

Sounds....marvelous.

Digital Stocks are provided by Market Place Securities MPS Ltd,Cyprus Investment firm regulated by CySEC, license number 170/12. Crypto Currencies Exchange services are provided by Coins Marketplace Technologies OU regulated by the Estonian FIU, license number FVR000051 for providing services to exchange virtual currencies against fiat currencies, and license Number FRK000039 for providing a virtual currency wallet services.

So no real licenses for that...

Do we have an official statement that Nasdaq is indeed their business partner as they claim?

[exstasie]

SEC won't be happy
It's very easy to shut down the blockchain company. Or at least to cut their access to stocks.

They are trying to swim with a big fishes:

https://en.wikipedia.org/wiki/Cede_and_Company

"Cede technically owns substantially all of the publicly issued stock in the United States.[2] Thus, investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede."

Good point about Cede & Co. DX is probably playing with fire by offering these markets.

They're trying to dodge all SEC oversight by not offering securities to United States residents, but every transaction they make involves contractual obligations to multiple U.S. financial institutions. Cede & Co transfers stocks on behalf of Depository Trust Company (a New York corporation), who maintains omnibus securities accounts on behalf of investors.

[1Referee]

Do we have an official statement that Nasdaq is indeed their business partner as they claim?

Where do they claim that Nasdaq is their business partner?

Obviously, it's not. The only connection in the future there will be between Nasdaq and this platform, is a connection in form of a legal battle to have it be shut down and the owners/operators arrested. If there is one country you don't want to mess with, then it for sure is the US. They severely overestimate themselves, but underestimate the capabilities of the authorities.

The funny part is that it won't just be US stocks, soon there will be stocks listed from plenty of countries at the same time, which means that they only keep adding more 'enemies' to their list that wants them offline. It's a kamikaze mission.

[stompix]

Do we have an official statement that Nasdaq is indeed their business partner as they claim?

Where do they claim that Nasdaq is their business partner?

On their website, bottom left:



Trading Technology Partner: Nasdaq.

[exstasie]

Where do they claim that Nasdaq is their business partner?

On their website, bottom left:



Trading Technology Partner: Nasdaq.

It sounds like they're just licensing their back-end and order matching technology. They're obviously trying to act like there is a significant business relationship between the two for branding purposes, but I'm pretty sure this is the extent of it:

While the first advantage is quite self-explanatory, Skowronski further explained that their technology would rely on NASDAQ’s infrastructure, such as its matching engine – used by over 70 exchanges around the world.

https://www.financemagnates.com/cryptocurrency/exchange/exclusive-nasdaq-powered-crypto-exchange-dx-set-to-launch-next-month/

So DX is one of seventy-something exchanges who are using "NASDAQ’s technology." I doubt it goes any further than that.

[The Sceptical Chymist]

Also, I think it's too early to be happy that Wall Street sharks are pumping cryptocurrency market. SEC will never allow anyone to do such actions behind their backs. In a while, they will block it with some regulation and this will be the end.

That's what I'm thinking--and I also posted something about having a 24/7 stock exchange based on using a blockchain last year or so, but I can't find my post.  It would definitely be awesome not to have to be limited to trading stocks between 9:30am-4pm.  But yeah, the SEC would either nix this idea or find some way to regulate or exploit it to their advantage.

A lot of people think that because of all this decentralization that things can't be shut down, and that's just not the case.  If a government makes something illegal, e.g., using a blockchain as a way of side-stepping a traditional stock exchange, do you actually think legitimate companies are going to thumb their noses at the law?  Absolutely not.  The only thing you'd see are scam companies offering shares on any blockchain exchange that existed.

It's a kamikaze mission.

That's kind of my impression about this as well, but we'll see.

[stompix]

!

It sounds like they're just licensing their back-end and order matching technology. They're obviously trying to act like there is a significant business relationship between the two for branding purposes

And even if it's just acting it still can be considered as trying to deceive customers.
I was also a Microsoft partner when I was doing freelance work as I was using a genuine windows license for my laptop at the time.  , but I've never advertised that.

It's a kamikaze mission.

That's kind of my impression about this as well, but we'll see.

Kamikaze missions, although very rare have managed to take down the enemy with them, but in this case, it's going to be more like the SEC squashing a fly.

And the main reason I would love to see this fail is that I absolutely hate and I hated since my adolescence chains of intermediaries. So you trade on this exchange, which is partnered with another company in Cyprus which is the link between this exchange and another company that is actually buying the stock.
And who is going to feed and load the pockets of this army of middlemen?  Of course, the customers!

It seems like every damn business that sets up lately is going against the principles of eliminating those links.