Update: I’m seeing a lot of negative press and complaints about DX.Exchange, I cannot in good faith recommend their services until I try it out myself. Please, carefully research their services before depositing your money with them. I’m going to leave this post up because tokenized stocks and STOs are an emerging technology and will change the financial industry in a profound way. I will cross out their name to get the message across.
In 2019 we saw the release of
DX.Exchange, an Estonia-based cryptocurrency exchange that uses the NASDAQ engine (the NASDAQ is the second-largest stock exchange on the planet). This will open the floodgates of tokenized stocks to the rest of the world. Investors that do not want to drop $1,000+ on a single share of Amazon or Google will now be able to buy a fraction of them in the form of a digital stock. DX is the first exchange where you can buy virtual stocks and cryptocurrencies on the same platform.
These virtual stocks are backed 1:1 by MPS MarketPlace Securities Ltd. They will buy the shares themselves and then generate smart contracts to represent the stocks. You will also be able to buy the stocks (and crypto) without any commission fees. You will be able to buy both with fiat, this will simplify the process of buying cryptocurrency. It will also open up investment opportunities to people living in third world countries. Third world countries with limited access to investment opportunities will now be able to create wealth with nothing other than an internet connection and a sound investment strategy. Investors will also be able to trade around the clock, normally traders were limited to the normal trading hours of 9:30 to 4:00 PM.
STO – The ICO Killer
The icing on the cake is their implementation of STOs (Security Token Offering) which will be replacing ICOs (Initial Coin Offering). The STO will enable companies to raise funds (similar to an ICO). However, they are asset-backed and must comply with regulatory governance. This will reduce the amount of fraud which has been so pervasive with ICOs.
“STOs are registered with the Securities and Exchange Commission (SEC) and they take advantage of securities exemption such as Reg A+. They, therefore, have a lot of similarities to shares. For example, tokens issued in STOs give investors some rights to the firm or organization issuing them.”
DX.Exchange is currently authorized and regulated under the European Union.
We will soon witness the birth of the first global crypto and stock exchange allowing traders to buy some of the world’s most valuable stocks and cryptocurrency all on the same platform. The question then becomes, should we have one world exchange to manage these trades and assets? Being able to trade outside of normal hours puts those who are sleeping at an unfair disadvantage. If news breaks out that a major oil company’s (guess who?) stock price plummets after a major oil spill, only investors who are awake will be able to trade on such news.
I think we will eventually have to see a One World Exchange so trading can be halted in the event of a disaster or panic. A single (or multiple, on one platform) regulatory agency will drastically reduce the amount of fraud that has plagued the crypto world. The next question then becomes, will we see a One World Currency? Government? The way crypto is enabling us all to become more connected is astounding. There will be growing pains within this period but the financial industry will mature into a more transparent, self-regulating machine as this evolves.
DX is not yet available to investors in the United States. The CEO at DX.Exchange recently tweeted that access will be given to the US sometime in 2019. He wants to make sure everything is operating smoothly in the EU first. Reviews are mixed from what I can see online so please do your own research on this exchange before investing any of your money. If DX does not succeed with this, another company will – the idea and the technology exists.
Disclaimer: The above references an opinion and is for information purposes only. This is not investment advice. Seek a duly licensed professional for investment advice.