Estonia may be known for its friendly approach to cryptocurrency and now a fresh new startup had cropped up in the country which will spark buying and selling of tokenized stocks starting this week.
The Chief Operating Officer at DX.Exchange stated “we, at DX.Exchange, are launching the First Regulated & Digital Stocks Exchange of the world! Connecting Markets, each Digital Stocks is backed 1:1 with Real Stocks.”
No further comments were made on how this would work but on the website it says:
“MPS MarketPlace Securities, Ltd, under the supervision of the Cyprus Regulator, CySEC, purchases real world stocks, in accordance to token demand in the DX.EXCHANGE platform. They generate smart contracts, ERC20 tokens created on Ethereum’s network to represent those stocks. The tokens offered for sale are be based on leading public company shares listed on the biggest exchanges like NASDAQ, NYSE, Hong Kong Exchange and Tokyo Stock Exchange.”
The website goes onto state:
“Each Dx.exchange customer, interested in Digital Stocks, is asked to go over an additional small approval form with Term & Conditions, MIFID 2 compliant, where he will need to approve to enter into an agreement with MPS for buy/sell of Digital Stocks. MPS MarketPlace Securities, Ltd is the trust holder of the stocks on behalf of the token holders. Since Digital Stocks are not like CFDs with leverage, there are no carrying costs for the token holders. Each token is backed 1:1 by one share of real stock. These shares are held in a segregated account.”
Essentially, this means that it is similar to Tether but instead of dollars it is with stocks. With this, the same issues would arise and questions like how do we know they really hold stocks would come into play.
As reported by TrustNodes; “this significant level of centralization probably means there's a considerable level of regulatory barriers.” the exchange say they regulated, but they are currently unsure of whether or not this is misleading. They provided more detail by saying; “coins Marketplace Technologies OÜ holds two operating licenses with the Estonian Financial Intelligence Unit. License Number FVR000051 is for providing services to exchange virtual currencies against fiat currencies, and License Number FRK000039 is for providing a virtual currency wallet service. Customers FIAT funds are kept in a segregated custody account.”
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