tZERO, one of the first exchanges to support digital securities, has announced a collaboration with North Capital’s PPEX to enable users of the alternative trading systems (ATSs) to access tokenized securities from both venues. They are developing a registry and routing solution, Agora, to enable connectivity with other ATSs and liquidity providers. The goal is to enable one connection to enable interoperability with multiple venues.
This interoperability would address fragmentation and expand liquidity for the assets listed on each exchange. Currently, digital securities suffer from fragmentation at several levels. Tokens might carry different rights, depending on where the users access them. A tokenized security in some cases gives full shareholder rights, in other cases it may be a derivative, although that may be a bigger issue for listed securities rather than private markets that tZERO and North Capital target. Digital securities might be issued on different platforms and/or blockchains and use different token standards. And they may be listed at a variety of secondary market venues.
“Private securities markets have operated in silos for too long,” said Jim Dowd, CEO of North Capital. “Agora’s purpose is to create the connective infrastructure to allow ATSs to maintain their independence while participating in a broader network that will be expanded through tokenization on public blockchains. This is how we unlock liquidity in private markets.”
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