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BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, has received the green light from the US Securities and Exchange Commission (SEC) to operate a blockchain-based securities exchange.
BSTX aims for immediate or accelerated settlement (T+0 or T+1) due to transactions occurring on the blockchain. It will also provide market data recorded on the blockchain in a process similar to Oracle. This will be done through a blockchain managed by BSTX.
The exchange will be open to both retail and institutional investors.
BOX has been trying to get SEC approval for some exchange since 2020. The first iteration of the application was for the Security Token Offering (STO) platform.
In 2020, the SEC rejected BOX’s application to record end-of-day securities holding balances and other trading data on the Ethereum blockchain.
“Today, the SEC has taken an important step forward by approving BSTX as the national securities exchange,” BSTX CEO Lisa Fall said in a statement. “We are committed to continuing to work closely with the SEC to launch the new fully regulated exchange and help provide the capital markets with more modern tools for issuers and investors.”
BSTX has said it is working to eventually support regulated cryptocurrency markets alongside its equity offerings.
The SEC press release said the approval is contingent on BSTX joining the relevant national market system plans. These are structures created to disseminate market information in real time. The SEC will also require BSTX to be part of the Intermarket Surveillance Group, which is an industry task force used to coordinate regulatory compliance.
“Today’s approval is just the beginning for BSTX. We are encouraged by the efforts being made to date by both traditional and non-traditional financial actors. Using future rule filings, we plan to respond with a number of further innovations that will benefit both the issuer and the trading communities,” Fall added.
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