As tokenization of traditional assets continues to gain momentum, many platforms are racing to offer tokenized stock trading.
Talk about the intersection of Wall Street meeting blockchain tech, and cracking and back teaming up with B&B chain to expand access to tokenize US equities globally.
This partnership brings BMB chain into the XStocks Alliance, accelerating.
On chain trading of US stocks.
Well, joining me to weigh in this morning is Mark Greenberg, global head of consumer business at Crack, and Mark, good morning.
Thank you so much for joining us.
So of course we're all focused on the price of crypto majors this morning, but tell us how trading tokenize equities on BMB chain affects institutional portfolio management as well as assessing risk.
Yeah, look, um, legacy finance to a large extent has fallen behind.
This ratify system still running a little bit on outdated infrastructure, limited trading window, slower settlement, higher fees.
And that's especially true for non-US users, and those are barriers that we think tokenized equities can really help us overcome.
Tokenizing real world assets is crypto's next major unlock, and it's a $1 trillion opportunity.
And so if you're thinking about, if you're, if you're a larger institution or you're thinking about how you're going to unlock value for the next generation of investors, I think this is a big part of it.
Yeah, and speaking of what's happening in the crypto landscape, of course when it comes to US stock futures, we can wait for that 6 p.m. hour on Sunday evening to see how markets in the US will open in terms of equities, but I know all of us, we are keeping a Close eye on what was happening not just with crypto majors but also out coins over the weekend, especially ahead of the market open.
But when it comes to what you're talking about, what liquidity levels can institutions expect when trading stocks compared to traditional exchanges?
So look, we're in the very early days of tokenized equities, and part of the reason we've chosen an alliance like Xtos where we have B&B and Solana and Jupiter and Bybit and Gate and Camino and many, many, many others over time who will come and join us is trying to create a single standard for these. of tokenized equities that can be used around the world and can gain liquidity over time.
At this point, still early days, probably not the time for a huge $100 million trade in anything, but that's not something that we expect to last for long.
And given all of the benefits, as you said, the ability to trade 24/7, the ability to trade from countries around.
The world, the ability to move your assets and hold them in a self-custodial wallet, the ability to use your assets on chain as collateral, all of those reasons we think more and more liquidity is going to come on chain to support tokenized equities, and we're just at the beginning of that, but it's we've been two weeks sort of into this experiment and it's going extremely well, and liquidity has come up every single day.
Yeah, Mark, you just mentioned that you're in early days, but how do settlement times on blockchain compare with conventional stock market settlements, especially when it comes to the larger trade?
Yeah, so at this exact moment we're, we're probably a little bit more focused on retail for the foreseeable future around tokenized equities on chain.
Settlement is instantaneous.
You can send this anywhere.
It will move immediately, and, and so if you wanted to do a big block trade of X stocks, you could do that directly.
The question is now whether we can, is how long it will take for markets to grow the liquidity to the so that you can trade. on those on chain dex markets and on places like Kraken.
On Kraken, you can already buy pretty large amounts and sell them as well 24/7, 24/5 on Kraken, and then on dexes you can do it 24/7, just a matter of time before you'll be able to do it with that zero instant settlement immediately at any size of trade.
But right now if you're a retail user you can do that in a number of markets around the world.
Yeah, Mark, building on what you just said, for retail investors out there with opportunity comes risk.
So what risks should these retail investors be aware of when trading tokenize equities on blockchain?
Yeah, so first, there's the same kinds of risks that you'd expect from anything you hold self-custodial.
Make sure that you are acute to scams or fraud or those types of things which happen in all spaces but are a little.
It more prevalent in places like blockchain at the same time, um, make sure that you're working with a provider that uh that is using something that is fully reserved like X docs where the underlying securities are held 1 to 1.
And that's not true for all of the tokenized equities products out there.
A lot of them are actually just derivatives, and some aren't fully hedged.
And so I would strongly encourage everyone to really understand the product that they're using and use one like Xtos, which is backed 1 to 1.
Yeah, and Mark, for people who are already in the market, how do you tokenize stocks integrate with popular retail trading apps or wallets out there, and can they use tokenized equities as say collateral for borrowing or even for deep by lending?
Yeah, so exactly.
So it depends on which country in the world you're in, but in much of the world, yes, today you can, you can, you can use tokenized equities exactly the same way you can use any crypto assets.
So yeah, you can, you can trade it on a DAX, of which there are many on Salon and on BNB chain that you're able to use these on.
You can trade them 24/7.
You can put them into your wallet like Phantom or whatever wallet you're using.
And you can, you can trade them as simply as you would trade Bitcoin or any of the altcoins.
I think that's pretty exciting and then and then use it as Defi on chain as well.
So lots of opportunity here.
We're going to, we right now most of the applications on chain are sort of taking tokenized equities very similar to the way they handle crypto assets, but we expect over time a whole new generation of applications and DeFI tools that are designed specifically around.
Tokenized equities like X stocks and allow you to do even more interesting things with your tokenized equities than you could with stocks on a broker.
You know, one of my personal favorites is just the ability to move it from one wallet or one provider to another.
You can take an X stock from Kraken to buy it or vice versa instantaneously.
You don't have to wait for your broker to go through paperwork and move it across manually if you want to change from one app to another.
OK, Mark, well, we will have to leave it there, but this is something that we'll be keeping our eyes on.
So thank you so much for joining us today and thank you for sharing your insights.
Thanks, Jeremy.
