One of the biggest and oldest crypto exchange has launched tokenized stock trading through a subsidiary called Bittrex Global.
“Tokenized stocks are tokenized derivatives that represent traditional securities, particularly shares in publicly firms traded on regulated exchanges such as Tesla, Apple and Facebook,” they say, further adding:
“Tokenized stocks are a tokenization of a digital total return swap contract (“TRS”) (similar to contracts for differences). The Tokenized stocks value is based on and collateralized with a digital asset representation of the underlying asset, a traditional security (typically a publicly traded equity) and the value of the digital asset is determined by the value of the traditional security.
For example, they are collateralized by an equivalent notional amount of the traditional security (i.e., $100 of the debt derivative would be collateralized with $100 of the traditional security). This allows Tokenized stocks to mirror the economic performance of the applicable reference traditional securities.
Tokenized Equities may also represent innovative baskets or indexes of traditional securities as well as traditional securities plus cryptocurrencies (for example, the S&P 500 AND BTC). Tokenized Equities may also include leverage as well as long or short exposure.”
It’s not clear just how much of a token these are because you can’t withdraw them from Bittrex Global, but you can receive dividends on the token with the company claiming it is spot trading.
CM-Equity is the custodian which they say is fully regulated in Germany, with it being a licensed financial institution permitted to offer these products.
Bittrex Global itself is licensed in Bermuda, with it being under Bittrex’s own domain which operates in the United States.
Unfortunately for Europeans, they can not currently buy these stocks on Bittrex Global, making it a lot more just stock trading than an actual tokenized stock.
The exchange however says you may be able to withdraw the tokens in the future and Europeans may be able to participate in the future.
They offer Alibaba, Pfizer, BioNTech, an S&P500 ETF, Google, and a lot more with each buyable as a fraction of the stock, instead of as a whole as would be required in traditional stock markets.
So making this a first step as some crypto exchanges expand into more traditional finance to offer more accessibility to in particular the US stock market.