A regulatory filing from OKXICE, a joint venture between OKX and NYSE owner Intercontinental Exchange, listed more than 60 securities it plans to offer in tokenized form and explained how the new market would work
The list includes Nvidia, Tesla, Apple, Microsoft, Amazon and Alphabet, as well as crypto-linked companies Coinbase, Circle, Robinhood, Strategy and Securitize. JPMorgan, Goldman Sachs, Walmart, Netflix, Reddit and Boeing are also among the names
But inclusion in the filing doesn’t guarantee that every stock will trade on the platform, as companies can object to having their shares included during a 30-day window. Cerebras, for example, objected to the inclusion of its stock, according to the filing
“No symbol is a given,” TD Securities analysts wrote in a report on Monday
Take Nvidia. Instead of buying the stock through a traditional brokerage account and having the trade processed through the legacy stock-market system, an investor on OKXICE would buy a digital token representing an entitlement to an Nvidia share
The filing said the underlying stock would be held by a registered broker-dealer on a one-for-one basis, meaning one Nvidia token would be backed by one Nvidia share. Token holders would also be entitled to the economic and shareholder rights that come with the stock, including dividends and voting rights
Rather than paying in dollars, investors on the new platform would buy and sell tokenized stocks using digital dollars known as stablecoins. OKXICE plans to support USDC, USDT and USDG, three cryptocurrencies designed to maintain a $1 value
There also won't be the traditional system of matching a buyer's order with a seller's order. Instead, the stock tokens and digital dollars will sit in blockchain-based pools that investors can trade against. Buying Nvidia tokens takes them out of the pool and adds digital dollars, pushing the price higher. Selling does the reverse
The pools, known in crypto as automated market makers, or AMMs, use rules to determine the price at which investors can buy and sell. More sophisticated versions can also allow professional trading firms to actively adjust prices and the amount of stock available, potentially making the market behave more like a conventional exchange
“We see Prop AMMs and managed Multi-Pool Venues as much more consequential than conventional AMM models,” the analysts said, arguing that liquidity providers can actively adjust prices and inventory and are “less likely to be picked off by stale prices.”
Under that model, a market maker would set prices using market data and its own inventory, while another could combine several liquidity pools into a venue that resembles a traditional stock exchange
That system is similar to the technology already used by decentralized crypto exchanges, but OKXICE plans to apply it to stocks. The trades would take place on XLayer, a blockchain developed by OKX, and the pools will use decentralized exchange Uniswap’s plumbing
There is another major difference: trading doesn't stop when Wall Street closes
OKXICE plans to operate around the clock, including nights and weekends
That means an investor could theoretically buy or sell tokenized Nvidia on a Sunday afternoon, even though Nvidia's shares aren't trading on Nasdaq at the time. Prices on the new venue would be determined by buying and selling in its own pools rather than simply being set by the latest Nasdaq price
The market also won't be open to anonymous users. Investors will have to undergo identity and anti-money-laundering checks before they can trade, according to the filing
So while the investment may look familiar — a token backed by a share of Nvidia, with dividends and voting rights — the machinery underneath it is very different
Whether investors embrace it is another question, however
TD Securities said it still sees “limited near-term relevance for institutional investors,” in part because U.S. investors already have efficient access to listed stocks. It also pointed to weak interest from companies in having their shares tokenized and uncertainty around the regulatory framework
The SEC relief lasts five years rather than establishing permanent rules, which could make large financial firms reluctant to spend money connecting their systems to a market whose regulatory foundation could later change
The bigger test will be whether enough investors and trading firms participate to keep prices closely aligned with the traditional stocks, particularly overnight and on weekends when U.S. exchanges are closed
However, the venue will be the first test of appetite from both traders and corporations for tokenized stocks. "The biggest takeaway is NOT that OKXICE is launching another tokenized-stock venue," said Harvey Li, founder of Tokenization Insight
"It is that OKXICE could become one of the first real-world tests of which tokenization model can scale U.S. equities onchain the fastest, and ultimately become the dominant market structure."
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