Tokenized stocks have had a tough few months from a regulatory standpointBut that hasn’t stopped traditional financial giants and decentralized finance (DeFi) advocates from making new deals.
Bloomberg reported today that Nasdaq, Finnhub and Tiingo will provide their prices to DeFiChain, a DeFi platform built on the Bitcoin network.
DeFiChain offers the ability to trade tokenized shares that correspond to the underlying price of large publicly traded companies such as Tesla, Amazon and Apple. Tokenized shares, similar to a retired offering launched by Binance earlier this year, can be purchased in fractions without the need for investors to purchase a full, traditional share, for which custody of a physical share certificate is required.
Tokenized shares are secured by cryptocurrency, eliminating the need for an intermediary, and can also be acquired in the form of decentralized loans. Available to negotiate 24 hours a day, the purchase of a tokenized share does not confer ownership of the underlying asset on its holder, but rather allows it to potentially benefit from movements in the price of the asset.
The decentralized stock trading system offered by DeFiChain uses its native token, DFI, as well as Bitcoin (BTC) and the stablecoin USD Coin (USDC), which is pegged to the dollar.. Platform co-founder Julian Hosp said the “offering will open the door to a lot of people who are frustrated by traditional markets.” However, advocates like Hosp will increasingly have to deal with the increased attention regulators are paying to the DeFi space.
Last week, it was revealed that the US Securities Commission was investigating the startup behind the world’s largest decentralized cryptocurrency exchange, Uniswap.. Citing mounting regulatory pressure, the platform had already moved to delist dozens of tokens and tokenized shares by the end of July.
At the beginning of the same month, sales of popular Binance stock tokens, which represented fractions of shares of companies like Tesla and Coinbase, were suddenly suspended following pressure from the Hong Kong securities regulator and previous reports that European and British regulators had been examining the offer for possible breach of securities laws.