The blockchain subsidiary of online retailer Overstock has teamed up with BOX Digital Markets to build a regulated security token exchange.
Equally owned by tZero and BOX Digital, the new exchange plans to list and publicly trade security tokens for companies that issue, or convert existing stock to, security tokens.
BOX Digital is a subsidiary of BOX Holdings Group which owns and operates BOX Market, an equity options marketplace and a facility of BOX Options Exchange.
It will provide its expertise to help obtain regulatory approval from the SEC, and then in operating the venture under current BOX Options Exchange president Lisa Fall. TZero will provide cash and its blockchain technology.
Says Fall: "TZero has proven to be a pioneer in the development and practical use of blockchain technologies for capital markets for a number of years. TZero’s track record and accomplishments in this innovative area, coupled with BOX’s expertise in operating a highly efficient and transparent equity options marketplace, made partnering together an easy decision and we look forward to building a world-class platform for listing and trading security tokens."
News of the plan comes as a new report from Greenwich Associates suggests that stock certificates could someday be endangered, replaced by the new invasive species of security tokens.
"Blockchain-based securities will undoubtedly become a more common feature of U.S. securities markets — we are just at the beginning of this evolution,” says Richard Johnson, VP, market structure and technology, Greenwich Associates.