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Cryptocurrency exchange FTX is set to offer traders tokenized shares of some fortune 500 companies, including Apple and Amazon. This was revealed in a press release with key details about the listing of the new digital assets.
FTX will be partnering with European financial firms CM Equity and Digital Assets to offer fractional stocks on its platform. About a dozen stock and crypto pairs will be traded on the FTX trading platform. Some of the major names include Netflix Inc, Telsa Inc, Facebook, Apple Inc, and Amazon Inc.
Fractionalized stocks enable derivatives to be broken down into smaller bits allowing retail traders to speculate on expensive stocks with less capital. FTX stated that there are trading fees for the service, but the exchange would not charge extra management fees for holding the tokens. The crypto exchange also announced that traders in the U.S were restricted from trading these tokens.
Major Development for The Crypto Industry
This move by FTX was made in a bid to push securitized token assets to crypto enthusiasts. The crypto industry has grown rapidly, and there has been the introduction of new markets by several crypto exchanges in recent times.
Tokenization of real-world assets has also become popular in recent years, with gold, silver, and copper tokenized assets. Fiat currencies have also been tokenized, with big projects like Tether (USDT) and USDC dominating. The addition of securitized tokens by FTX enables users to trade shares of popular fortune 500 companies.
According to the CEO of FTX, Sam Bankman-Fried, the tokens were targeted at investors who cannot access stocks through traditional markets.“For many people, it’s a hassle” to access stocks, he said in an interview. “There are ways to do it, but they feel very much old and clunky. Giving people access broadens out what you can trade.”
He further revealed that the tokens would be similar to depositary receipt or ETF. ‘’Investors can trade the tokens on FTX but will need to cash them out for the underlying security via CM Equity, which holds the actual securities, he said.