SEC Approves BSTX to Operate as Blockchain-Based Securities Exchange

The U.S.
 
 Securities and Exchange Commission (SEC 
) has approved BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, to operate as a national securities exchange. The approval makes BSTX the first fully-automated, price/time priority execution exchange for trading securities, which is both regulated by the SEC and operates a blockchain-based securities exchange.

BSTX stated that it will provide several benefits to market participants. The regulated blockchain-based securities
 
 exchange 
will provide immediate or accelerated settlement (T+0 or T+1), thanks to the transactions that take place on the blockchain. BSTX will also offer market data recorded on the blockchain network run by the exchange. BSTX securities exchange will be open to both institutional and retail investors; for instance, providing greater access to the public markets for early-stage companies.

Besides that, BSTX highlighted two benefits that its blockchain-based securities exchange will offer to capital markets. First, BSTX will enable market players to make accelerated settlements for securities listed on the exchange. BSTX’s approach is similar to accelerated settlement capabilities currently supported by National Securities Clearing Corporation (NSCC) and the Depository Trust Company (DTC). On the second note, BSTX will use a private, permissioned blockchain network to enable industry participants to access certain proprietary market data associated with trading activity happening on the securities exchange.

BSTX seeks to support the interests of issuers as well as institutional and retail investors while setting a new standard for the usage of blockchain technology. The firm also sees its exchange as an ‘industry sandbox’ where a modern market structure can improve both trading and listing for all. BSTX expects that it will eventually be able to support regulated cryptocurrency markets.

Lisa Fall, the CEO of BSTX, talked about the development and said: “We are thrilled to have the SEC’s approval to launch a new fully regulated modern exchange facility and to leverage the latest available technology to create the next generation of capital markets for issuers and investors. The SEC has taken an important step forward today in its approval of BSTX as a national securities exchange. We are eager to continue to work closely with the SEC to launch a fully regulated new exchange and to help provide capital markets with more modern tools for issuers and investors. We are particularly grateful to our technology partner in this endeavour tZERO. We are looking forward to continuing to work with them to provide institutional grade trading technology to participants on BSTX.”

SEC’s Role in Securities Markets

The move by the US SEC to give BSTX a green light to launch its national securities exchange comes at a time when investment products such as securities, cryptocurrencies, among others continue to grow. So far, the regulator has remained sensible on imposing regulations keen to protect investors and traders. For instance, the market capitalization of digital assets like non-fungible tokens and cryptocurrencies was valued at $2.14 trillion in September 2021 and is still growing. Supporters, creators, and users of such assets have advanced various use-cases for them, including serving as a hedge against inflation risks, which help them solve income and wealth inequality. However, the SEC has good reasons to be concerned about such assets. Theft is rampant, tax compliance is limited, such assets may be used to facilitate money laundering and other illicit activities.

The U.S.
 
 Securities and Exchange Commission (SEC 
) has approved BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, to operate as a national securities exchange. The approval makes BSTX the first fully-automated, price/time priority execution exchange for trading securities, which is both regulated by the SEC and operates a blockchain-based securities exchange.

BSTX stated that it will provide several benefits to market participants. The regulated blockchain-based securities
 
 exchange 
will provide immediate or accelerated settlement (T+0 or T+1), thanks to the transactions that take place on the blockchain. BSTX will also offer market data recorded on the blockchain network run by the exchange. BSTX securities exchange will be open to both institutional and retail investors; for instance, providing greater access to the public markets for early-stage companies.

Besides that, BSTX highlighted two benefits that its blockchain-based securities exchange will offer to capital markets. First, BSTX will enable market players to make accelerated settlements for securities listed on the exchange. BSTX’s approach is similar to accelerated settlement capabilities currently supported by National Securities Clearing Corporation (NSCC) and the Depository Trust Company (DTC). On the second note, BSTX will use a private, permissioned blockchain network to enable industry participants to access certain proprietary market data associated with trading activity happening on the securities exchange.

BSTX seeks to support the interests of issuers as well as institutional and retail investors while setting a new standard for the usage of blockchain technology. The firm also sees its exchange as an ‘industry sandbox’ where a modern market structure can improve both trading and listing for all. BSTX expects that it will eventually be able to support regulated cryptocurrency markets.

Lisa Fall, the CEO of BSTX, talked about the development and said: “We are thrilled to have the SEC’s approval to launch a new fully regulated modern exchange facility and to leverage the latest available technology to create the next generation of capital markets for issuers and investors. The SEC has taken an important step forward today in its approval of BSTX as a national securities exchange. We are eager to continue to work closely with the SEC to launch a fully regulated new exchange and to help provide capital markets with more modern tools for issuers and investors. We are particularly grateful to our technology partner in this endeavour tZERO. We are looking forward to continuing to work with them to provide institutional grade trading technology to participants on BSTX.”

SEC’s Role in Securities Markets

The move by the US SEC to give BSTX a green light to launch its national securities exchange comes at a time when investment products such as securities, cryptocurrencies, among others continue to grow. So far, the regulator has remained sensible on imposing regulations keen to protect investors and traders. For instance, the market capitalization of digital assets like non-fungible tokens and cryptocurrencies was valued at $2.14 trillion in September 2021 and is still growing. Supporters, creators, and users of such assets have advanced various use-cases for them, including serving as a hedge against inflation risks, which help them solve income and wealth inequality. However, the SEC has good reasons to be concerned about such assets. Theft is rampant, tax compliance is limited, such assets may be used to facilitate money laundering and other illicit activities.

Source: https://www.financemagnates.com/fintech/sec-approves-bstx-to-operate-as-blockchain-based-securities-exchange/