Tokenized Stock Trading!
Yes, this is a BIG DEAL.
The SEC’s new INNOVATION EXEMPTION, permitting trading of tokenized stocks in the U.S., is one of the most significant developments in the history of capital markets.
Hard to believe my law firm was working with Overstock and others on stock tokenization a DECADE ago. None of us thought it would take this long to get the SEC’s blessing.
And now it’s finally here!
Why is this such a big deal?
When I started as a lawyer advising the securities industry, the operating standard for stock trading was “T+5.” It literally took 5 DAYS for stock trades to settle. 😂
In my professional lifetime, securities settlement has gone from 5 days to nearly instantaneous with blockchain-based settlement.
And the cost to trade has similarly gone from roughly 1% of the trade value to essentially zero.
As my father would say—“I never thought I’d see the day.”
Tokenized trading and blockchain-based settlement are here to stay.
The securities industry will never be the same.
Traditional trading venues (like NYSE & NASDAQ) will have to adapt rapidly, or die; as will the brokers who are/were the traditional interface between investors and stock trading venues.
But, as with any new technology—A LOT CAN GO WRONG.
Let’s just hope the pioneers in this space don’t screw it up for the rest of us. 😎
I wish them all great success.