Crypto exchange OKX and Intercontinental Exchange, the company behind the New York Stock Exchange, are teaming up to create a 24/7 trading platform for tokenized U.S. shares. The venture, known as OKXICE, lists Nvidia, Tesla and Apple among its initial offerings. The filing reveals the partners intend to tokenize over 60 securities, with transactions carried out against stablecoins via blockchain liquidity pools instead of a conventional order book.
A simple concept to state yet odd to hear: instead of purchasing a share via a brokerage account, you acquire a digital token on a blockchain that stands for that share. That token is secured one-for-one by an actual share held by a registered broker-dealer. Dividends and voting rights come your way, just as they would with the real stock. However, the exchange takes place within a pool of stablecoins — USDC, USDT and USDG — rather than pairing a buyer with a seller.
The Tokenization Trick
The key move is breaking down a well-known stock into a digital token on a blockchain. Take Nvidia as an example. Each token stands for one actual share held by a broker-dealer, so the two always match up. According to the filing, people who own these tokens get the same rights as the owners of the real shares, including any money paid out and the right to vote.
To grasp how it works, imagine your familiar stock wrapped in digital form. Nvidia’s token has a real Nvidia share sitting behind it, held by a registered broker-dealer on a one-for-one basis. The token itself is nothing more than a digital cover for that actual share.
Stablecoins and Liquidity Pools
This is where things grow strange. On a standard stock exchange, you place an order and wait for someone else to accept it. On OKXICE, there is no order book at all. Instead, the stock tokens and stablecoins rest in pools known as automated market makers, or AMMs. Pay with a stablecoin to buy a token, and the pool changes the price accordingly. Sell a token, and the pool shifts the other direction.
OKXICE is planning support for three stablecoins: USDC, USDT and USDG. Each of these tokens is built to keep a fixed $1 value. The pools decide the price at which investors trade through set rules. More advanced versions give professional trading firms the ability to change prices and inventory on the fly, so the market behaves more like a standard exchange.
“We see Prop AMMs and managed Multi-Pool Venues as much more consequential than conventional AMM models.”
That is from TD Securities, which wrote about the project in a Monday report. The analysts argued that liquidity providers can actively adjust prices and inventory and are “less likely to be picked off by stale prices.” One design combines several liquidity pools into a venue that looks like a traditional stock exchange.
OKXICE is using technology that resembles what decentralized crypto exchanges already employ. The project intends to apply it to stocks. Trades take place on XLayer, a blockchain created by OKX, while the pools rely on the infrastructure of decentralized exchange Uniswap.
Trading Without Walls
Trading never closes, and that is the key distinction. OKXICE aims to run without pause, day and night, seven days a week. So a purchase or sale of tokenized Nvidia could happen on a Sunday afternoon, while Nasdaq itself is shut down for the weekend.
The new venue’s prices will come from buying and selling within its own pools rather than being set by the latest Nasdaq price. Anonymous users will not be permitted on the market either. Instead, investors must clear identity and anti-money-laundering checks before trading, per the filing.
The filing covers over 60 securities, among them Nvidia, Tesla and Apple. The list’s appearance, however, does not mean every stock will be traded on the platform. A company has a 30-day window to object if it doesn’t want its shares included, and Cerebras objected to the inclusion of its stock, per the filing.
“No symbol is a given,” TD Securities analysts wrote in their report.
The Institutional Question
TD Securities has not given up on the idea despite investor hesitation. The firm still sees “limited near-term relevance for institutional investors,” citing that U.S. investors already hold efficient access to listed stocks. It also noted that companies have shown little interest in having their shares tokenized, along with uncertainty over the regulatory framework.
Instead of setting permanent rules, the SEC relief is limited to five years, which might discourage major financial institutions from investing in the work needed to link their systems to a market whose rules could shift again. The real question is whether enough investors and trading firms will take part so that prices stay closely tied to the traditional stocks, especially overnight and on weekends when U.S. exchanges are not operating.
What Comes Next
The filing for OKXICE signals a genuine desire from both traders and corporations to trade tokenized stocks, but it also surfaces legitimate concerns. Companies retain the right to opt out, and any regulatory relief provided under the arrangement will be limited in duration.
This effort stands apart from other blockchain projects because it actually ties digital tokens to real company shares. That makes it worth following. The question is whether traders will use it in large numbers, and whether the token prices can stay steady during the times when Nasdaq is not open for trading.
Source material: “More than 60 U.S. stocks including Nvidia and Tesla are headed onchain. Here’s how it works,” CoinDesk.
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