Nasdaq Proposes Tokenization of Major Corporations, Starting with Apple
In a groundbreaking move, Nasdaq is leading the charge in incorporating blockchain technology into the heart of the financial system. Bitcoin (ISIN: CRYPT0000BTC), often seen as a trailblazer for blockchain technology, has already demonstrated its potential to transcend the crypto niche and make a mark in the traditional financial world.
The debate surrounding the utility of blockchain technology persists, but Nasdaq is creating facts where it matters most - at the core of the financial system. The traditional finance world is gradually warming up to the idea, with signs of movement towards embracing this revolutionary technology.
Nasdaq's ambitious project aims to give issuers control over where and how their stocks are traded through tokenization. This could potentially render traditional intermediaries obsolete in stock trading. If approved, this project would pave the way for one of the largest practical tests of blockchain technology in the American stock market.
To ensure transparency and correct order processing, tokenized assets will be clearly labeled. Traditional intermediaries, such as the Depository Trust Company (DTC), will be involved in processing orders for tokenized stocks.
The benefits of blockchain technology in stock trading are promising. It promises higher liquidity, easier division of shares, and potential 24/7 trading with near real-time settlement. These features could revolutionize the stock trading landscape, making it more efficient and accessible.
The U.S. policy under new SEC chair Paul Atkins shows a growing openness to crypto innovations. Nasdaq has submitted an application to the SEC for regulatory approval to make tokenized versions of stocks tradable on regulated exchanges.
However, concerns about unauthorized trading and misrepresentation of real company shares have arisen, as most tokenized stocks have been issued by third parties. Investors are urged to tread cautiously and ensure they are dealing with legitimate platforms.
AI company OpenAI, for instance, recently warned against trading tokenized OpenAI stocks on platforms like Robinhood, as they were not authorized by the company.
Other financial giants, such as BlackRock, Franklin Templeton, and KKR, have also started projects to tokenize fund shares. Ondo Finance has launched a platform offering tokenized US stocks and ETFs to non-US investors on Ethereum.
The goal of these projects is to adjust fundamental definitions, including what legally constitutes a security. As the world of finance continues to evolve, it will be interesting to see how these developments unfold.
Meanwhile, investors continue to bet on Bitcoin itself, considered the mother of all blockchains and cryptocurrencies. The future of blockchain technology in the financial world is promising, and it seems that we are only just beginning to scratch the surface of its potential.
