FTX Enters TradFi, Launches Stock-trading Service For Fiat-backed Stablecoins

FTX, a crypto exchange led and co-founded by American billionaire Sam Bankman-Fried, has announced that its U.S. arm will be launching stock-trading services facilitated by fiat-backed stablecoins.

According to FTX, the platform will expand this functionality to all U.S.-based users in the coming months. The firm also said that the move will help it attract traditional financial institutions and traders to the crypto space.

This is a significant development, as it shows that FTX is serious about becoming a major player in both the crypto and traditional finance industries. The launch of this service also comes at a time when stablecoins are gaining more mainstream traction and attention, even while the decline of protocols such as Terra has shown the industry that algorithmic stablecoins may be dangerous and susceptible to manipulation due to their design.

Dubbed as FTX Stocks, the new feature enables users to trade and invest across hundreds of US exchange-listed securities, such as common stocks and exchange-traded funds (ETFs). However, because the feature is quite new, only a limited number of users in the country are eligible (pre-listed) for it as it gets released through FTX Capital Markets, a FINRA-accredited broker-dealer.

To date, FTX.US has been attempting to shift its regulatory status. The exchange, as a U.S. arm of an international exchange registered in the Bahamas, has made a formal request with the Commodities Futures Trading Commission (CFTC) to alter its existing “non-intermediate” model for crypto derivatives, thereby allowing the platform to bypass financial companies that currently enable these types of trades.

“Our goal is to offer a holistic investing service for our customers across all asset classes. With the launch of FTX Stocks, we have created a single integrated platform for retail investors to easily trade crypto, NFTs, and traditional stock offerings through a transparent and intuitive user interface,” shares Brett Harrison, President at FTX.US.

The new platform will initially route all orders via Nasdaq, a method that’s in keeping with its commitment to transparent trade execution and fair pricing. The stock trading will be commission-free, and FTX Stocks itself will not receive any payment or margin based on a given order flow. A select number of securities will also be made available for fractional share trading.

Notably, FTX.US has stated that it will be accepting payments for stock purchases in the form of fiat-backed stablecoins such as Circle’s USDC.

This news comes days after it was disclosed that FTX CEO Sam Bankman-Fried has purchased a 7.6% stake at Robinhood, a popular trading platform that also offers commission-free trading for a number of cryptocurrencies and stocks. Robinhood’s stock has since risen by roughly 23% upon the investment’s disclosure.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.