BitGo and OTC Markets Group have announced their intention to explore a strategic alliance that would bring digital asset trading and custody to the 150 plus broker dealers that use OTC Link ATS, the SEC regulated alternative trading system. While the announcement is written entirely in the conditional and neither company has committed to anything yet, it outlines an ambitious structure for trading and settling tokenized stocks and other digital asset securities. That may involve BitGo effectively acting as a depository for the tokenized layer of a market segment that is currently underserved.
The collaboration appears to have two phases. The near term focus would cover digitally native securities, the kind of tokens issued under existing exemptions (like Reg D) that already trade on venues such as tZERO and Figure Securities. The longer term ambition, contingent on regulatory developments, would extend to tokenized versions of the OTC stocks that are OTC Markets’ core business.
For the second phase, the structure implies that BitGo Bank and Trust, an OCC chartered national trust bank, would hold the underlying securities and issue tokens representing entitlements to them. This is the same model used by the Depository Trust Company, where Cede & Co holds the shares and investors hold entitlements recorded on DTC’s books.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
