OKX has launched trading in more than 40 tokenised stocks and ETFs, including the so-called Magnificent Seven securities comprising NVIDIA, Tesla, Microsoft, Alphabet, Amazon, Apple and Meta, as well as the S&P 500 and Invesco QQQ indices. Observers suggest the move is an early step to establishing itself as leading hybrid trading platform for traditional and tokenised assets, and for both the retail and institutional markets.
While not yet available to market participants in the US or the European Union due to regulatory restrictions, OKX customers across Southeast Asia, Northeast Asia, the CIS region, MENA and Turkey can now trade these tokenised assets 24/7 against the USDT stablecoin using their existing crypto accounts.Significantly, OKX has organised these tokenised securities into a single unified order book with potentially multiple issuers per security, which it says will boost liquidity and provide better execution compared to listing each tokenised security separately, as it suggests most exchanges do.
In a blog post, OKX notes: “Tokenised real-world assets are one of the fastest-growing areas of digital assets, but they’re still in the early stages of market development. As more institutions begin issuing tokenised stocks, simply listing every version separately would create an increasingly fragmented market.”
While OKX’s plan is to attract several issuers for each security, its order book is initially populated by xStocks, issued by Backed Assets, a specialist token issuer located in the UK’s Channel Islands. xStocks are collateralised 1:1 by underlying securities and are minted on OKX’s X-Layer Ethereum-compatible Layer-2 blockchain.
OKX allows users to buy and sell xStocks from their existing crypto account, funding transactions with Tether’s USDT stablecoin and managing transactions via a familiar trading interface. Trading is available 24 hours a day, seven days a week. When US markets are closed, pricing is based on the latest market close together with fair value estimates.
When companies pay dividends, the value is automatically reinvested at the issuer level and reflected as an increase in an investor’s xStocks balance on OKX.
For institutions, trading in xStocks is also possible via OKX’s high performance API service, which supports 400,000 queries per second, and offers a median trade execution latency of three milliseconds.
Founded in China in 2013 as OKCoin, a retail platform for native crypto markets, OKX recently established its global HQ in San Jose, California and has focused heavily on bolstering both its institutional services and its regulatory standing in key jurisdictions. In the US, it is now registered as a Money Services Business (MSB) with FINCEN and is licensed as a money transmitter in more than 40 US States for spot crypto trading. That said, approval for its tokenised stocks service remains a work in progress in the US, UK and EU countries.
While it is unclear when US retail users and trading firms will be able to trade tokenised stocks on OKX, the exchange’s institutional ambitions are clear as it has introduced mechanisms to support complex trading strategies and allow for third-party custody of assets.
This March, Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), invested $200 million in OKX, valuing it at some $25 billion. That investment underpinned a partnership that includes data licensing of OKX spot crypto data that will allow ICE to develop US-regulated crypto futures for institutional investors. It is also expected to lead to the trading of xStocks around the world as regulations allow it. OKX has some 120 million retail users globally.
Also following the investment, in June, OKX and ICE formed a 50/50 joint venture called OKXICE. Co-chaired by former New York Governor Andrew Cuomo and ICE SVP Trabue Bland, the JV will build infrastructure to bridge traditional finance with digital assets.
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