BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, has received the green light from the United States Securities and Exchange Commission (SEC) to operate a blockchain-based stock exchange.
- BSTX aims at immediate or accelerated settlement (T+0 or T+1) through transactions that take place on the blockchain. It will also provide market data recorded on the blockchain in an oracle-like process. This will be done through a blockchain managed by BSTX, the company said.
- The exchange will be open to retail and institutional investors.
- BOX has been trying to get SEC approval for some type of exchange since 2020. The first iteration of the application was for a Security Token Offering (STO) platform.
- In 2020, the SEC rejected BOX's request to record end-of-day security ownership balances and other trade data on the Ethereum blockchain.
- "The SEC took an important step today in its approval of BSTX as a national stock exchange," BSTX CEO Lisa Fall said in a statement. "We look forward to continuing to work closely with the SEC to launch a new fully regulated exchange and help provide capital markets with more modern tools for issuers and investors."
- BSTX said it strives to eventually support regulated crypto markets alongside its stock offerings.
- In a statement, the SEC said the approval was contingent on BSTX joining the relevant national market system plans. They are structures established for the dissemination of market information in real time. The SEC will also require BSTX to be part of an Intermarket Watch Group, which is an industry task force used to coordinate regulatory compliance.
- “Today's approval is just the beginning for BSTX. We are encouraged and energized by the up-to-date awareness of traditional and non-traditional financial participants. Using future rule filings, we plan to respond with a number of additional innovations that will benefit both issuers and trading communities,” added Fall.