Renowned Crypto Exchange FTX to Offer Stock Trading Feature

• Users will also be able to fund their brokerage accounts on FTX using stablecoins.
• The exchange claims it will not be paid for order flow (PFOF).

FTX, a cryptocurrency exchange, is starting stock trading for its users in the United States via its U.S. branch. Bankman-Fried, the wealthy co-founder, said that the company’s debut would begin in private beta for a small set of consumers from a waitlist before going live in full by the end of 2022.

Range of Options for Investors

According to FTX, the world’s second-largest crypto exchange, it would provide “hundreds of U.S. exchange-listed securities, including common stocks and ETFs,” which would include fractional shares in some equities.

It’s worth noting that FTX intends to use Nasdaq to fulfil all orders instead of a third-party market maker. As a means of order fulfilment, the exchange claims it will not be paid for order flow (PFOF). Market makers pay Robinhood for sending orders their way, which has made the exchange renowned. Consequently, investors may not obtain their shares at the best possible price, as the market maker is profiteering from the spread.

The third-party market makers may generate big money for Robinhood by using PFOF. On the other hand, for the FTX service, earnings will be forfeited since it delivers the service to consumers without charging a fee or commission. According to the company, users will also be able to fund their brokerage accounts on FTX using stablecoins like USDC.

In Bankman-view, the news signals the beginning of FTX’s transformation from an institutional trading platform to one that caters to the diverse demands of individual investors. Bankman-Fried purchased shares in Robinhood in the previous week, which might signify that he’s making progress toward that goal.