BSTX Receives SEC Approval for Blockchain-Powered Securities Exchange

Blockchain technology will now be powering a fully automated national exchange for the first time.

By Sam Reynolds

Jan 28, 2022 at 6:23 a.m. UTC

Updated Jan 28, 2022 at 4:18 p.m. UTC

Sam Reynolds

Follow @thesamreynolds on Twitter

BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, has received the green light from the U.S. Securities and Exchange Commission (SEC) to operate a blockchain-based securities exchange.

BSTX is aiming for immediate or accelerated settlement (T+0 or T+1) thanks to the transactions taking place on the blockchain. It will also provide market data recorded on the blockchain in a process similar to an Oracle. This will be done via a blockchain run by BSTX, the company said.
The exchange will be open to both retail and institutional investors.
BOX has been trying to get SEC approval for some sort of exchange since 2020. The first iteration of the application was for a Security Token Offering (STO) platform.
In 2020, the SEC declined BOX's application to record end-of-day securities ownership balances and other trading data to the Ethereum blockchain.
“The SEC has taken an important step forward today in its approval of BSTX as a national securities exchange,” BSTX CEO Lisa Fall said in a statement. “We are eager to continue to work closely with the SEC to launch a fully regulated new exchange and to help provide capital markets with more modern tools for issuers and investors.”
BSTX said it is working to eventually support regulated crypto markets alongside its equity offerings.
In a release, the SEC said the approval is conditional on BSTX joining relevant national market system plans. These are structures set up for the dissemination of real-time market information. The SEC will also require BSTX to be part of an intermarket surveillance group, which is an industry working group used to coordinate regulatory compliance.
“Today’s approval is only the start for BSTX. We are encouraged and energized by the outreach to date from both traditional and non-traditional finance participants. Utilizing future rule filings, we plan to respond with a series of further innovations that will benefit both the issuer and trading communities,” added Fall.

Read more about

Tzero SEC Joint Venture

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.