Kraken Launches Digital Tokens To Offer 24/7 Trading of US Equities (reuters.com) 7
Kraken is launching tokenized versions of U.S. equities for 24/7 trading outside the U.S., giving global investors blockchain-based access to major companies like Apple and Tesla. Reuters reports: Tokenization refers to the process of issuing digital representations of publicly-traded securities. Instead of holding the securities directly, investors hold tokens that represent ownership of the securities. The tokens' launch outside the U.S. comes amid growing interest in blending traditional finance with blockchain infrastructure. While tokenized securities have yet to gain widespread adoption, proponents say they hold the potential to significantly reshape how people access and invest in financial markets.
In a January opinion piece for the Washington Post, Robinhood CEO Vlad Tenev said tokenization could also allow retail investors to access private companies' stocks. Kraken's tokens, called xStocks, will be available in select markets outside the United States, it said, without naming the markets. The move was earlier reported by the Wall Street Journal. The offering is currently not available for U.S. customers.
In a January opinion piece for the Washington Post, Robinhood CEO Vlad Tenev said tokenization could also allow retail investors to access private companies' stocks. Kraken's tokens, called xStocks, will be available in select markets outside the United States, it said, without naming the markets. The move was earlier reported by the Wall Street Journal. The offering is currently not available for U.S. customers.
It's a PR piece (Score:2)
COULD
This sounds like an index tracking fund. So how do they squeeze dollars out of thin air to buy shares on a stock market?
Re: (Score:1)
Not the best idea (Score:2)
- How are you going to verify that the digital token is actually tied to a share of stock?
- Can i buy 100 shares of a large slow company, like AT&T, then let this company create tokens for them and receive a 'rental' payment each month for 'lending out' my shares? This is already done for stocks which are hard to find for selling short. (Excluding the naked short selling of more shares than are available.)
- Many large companies are already traded 24x7 by listing on the US, US extended hours, US overn
How about ... (Score:1)
... a closed-end mutual fund that trades on a 24/7 market?
Or better yet, the actual underlying security trading on a 24/7 market.
Risky in so many ways (Score:2)
allow retail investors to access private companies' stocks
That's not going to end well. I do realize this is non-US, but just the concept is fraught. How would these retail investors know about valuing the company? How is liquidity created?
That brings me to the general suspicion of all of it though I'm curious to see it play out. Without proper market makers I would imagine bid/ask spreads to be quite wide. If another crypto operator does the same thing, will there be pricing parity? I love the smell of arbitrage in the morning. Seems problematic in many ways.
Re: (Score:1)
There's zero chance this isn't a scam.
I'd say there's a low-but-non-zero chance it's not a scam.
You COULD do this legimately, with the backing of a regulated-but-non-US company or even by a reputable non-US government to back it. But why? Other than "proof of concept" or "bragging rights" there's not much in it for the non-scammy company that wants to run it, other than maybe taking a piece of the action with every trade. But existing ways of doing trades are efficient enough for both the market-managers and the buyers and sellers that this b