ETF trading on the blockchain signals where digital currencies could be headed

By March 6, 2019Ethereum
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Investors in some parts of the world can now buy and sell the largest exchange-traded funds using cryptocurrencies, adding to the growing list of financial assets that are hitting the blockchain.

Estonia-based cryptocurrency exchange DX.Exchange said on Wednesday its clients can now trade 15 of the most popular ETFs on its cryptocurrency exchange, hinting at where the nascent market may be headed.

The announcement is part of a growing shift to tokenize financial assets that proponents argue gives investors the ability to trade traditional assets they might otherwise struggle to do. “If you look at stock trading, it’s really for the middle and upper class,” said Daniel Skowronski, co-founder and CEO of DX.Exchange. “With fractional ownership, it opens up stock ownership to the bottom billion and people can, for example, own $10 worth of Facebook shares.”

Fractional ownership is where investors can own part of a single stock, ETF or other asset.

Investors exchange Ether, ETHUSD, +1.77% the native cryptocurrency of the ethereum blockchain, to gain exposure to the ETFs of their choice, which are purchased and held by MPS MarketPlace Securities, a partner of DX.Exchange.

ETFs available include the SPDR S&P 500 ETF Trust, or SPY SPY, -0.28% which tracks the S&P 500 and theInvesco QQQ Trust QQQ, -0.30% which tracks the Nasdaq-100 index. Additionally, investors will be able to use digital currencies to bet against the popular indexes through products such as the ProShares Short S&P 500 SH, +0.36% and the ProShares Short QQQ PSQ, +0.33%

The move comes two months after the exchange began offering stock trading on its cryptocurrency platform.

DX.Exchange is not regulated in the U.S., but because it’s regulated by the European Securities and Markets Authority, it is available in about 170 countries, including many emerging market countries.

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