The SEC has approved BSTX (Boston Security Token Exchange) as a national security exchange. The initiative is a joint venture between BOX Digital Markets and tZERO, an Overstock subsidiary. Certain order and post-trade data will be recorded on an enterprise blockchain. However, the stocks are custodied by the DTC, and clearing is to be via the NSCC.
A number of platforms for security tokens are regulated in the United States, but they invariably opt for the lighter touch Alternative Trading Systems (ATSs) regulation. Examples include Securitize, Figure and BSTX partner tZero. Hence, BSTX is pretty big news. By automating much of the process a key aim is to cut the cost of raising finance.
BSTX says its the first fully-automated, price/time priority execution exchange for trading securities that uses blockchain technology. Given its partner is tZERO, we assume the technology is an enterprise version of Ethereum.
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