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Nasdaq Seeks Nod From U.S. SEC to Tokenize Stocks (www.coindesk.com)
submitted 11 months ago by to c/technology@lemmy.world
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The leading U.S. exchange for technology giants is moving toward blockchain-based listing and trading of stocks, filing a request with the SEC to pursue it.

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[–] 26 points 11 months ago* (4 children)

Fucking why?? What's the point?? You've already got a database, what does making it immutable and decentralized and inefficient help?? It's still under a central authority, so it's not even proper decentralised.

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  • [–] 14 points 11 months ago

    Because it either: Directly facilitates some fraud that they are trying to legitimize …or… They are trying to spend some of the perceived credibility of their stock market on legitimizing blockchain generally in the hope of facilitating some frauds that have nothing to do with their stock market.

    Either way, it’s about fraud. It’s always, always fraud with anything blockchain related.

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  • [–] 4 points 11 months ago (1 child)

    Prevents naked short fraud and manufacturing shares that they can locate at a later date.

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  • [–] 9 points 11 months ago (2 children)

    How does a regular database not do that?

    Either it's tracked or its not, the medium for that tracking doesn't really change much.

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  • [–] [S] 1 point 10 months ago* (1 child)

    How does a regular database not do that?

    There is no "regular database" running these exchanges because they're based on paper. That's another reason for tokenizing and using a public ledger.

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  • [–] 1 point 10 months ago

    I'm sure someone out there is running something on paper still, but that's not how most things are run.

    Additionally, unless people are legally required to do all exchanges on the public ledger (which seems highly unlikely), then you'd still end up with transactions not monitored on the public ledger.

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  • [–] 0 points 11 months ago* (last edited 11 months ago) (1 child)

    It would reduce the settlement time from multiple days to likely minutes.

    When you trade a stock today, it's not actually complete for 2 or 3 business days as it has to go through the settlement process. Generally, it doesn't cause problems for retail traders as exchanges act like its completed, but even for us it can introduce real issues sometimes and delay you from making a trade.

    For example, in Canada, the cheapest way we can convert CAD<-->USD is through a process called Norbits Gambit.

    You buy DLR.TO (CAD) or DLR.U.TO (USD) and then your have them journal your shares from one to the other for free, or a small fee like $10. You don't pay an exchange rate fee, however, because the trade hasn't actually settled when you buy the shares for 3 days, they can't journal them. So for 3 business days you're exposed to any fluctuation in the exchange rate. Generally that's cheaper than what a bank will charge you and it's the risk you take. It's also a 1 way risk, I can't recall if it's USD -> CAD or CAD -> USD, but one of them is locked in, and the other is exposed. (Edit: It's DLR.U.TO that exposes you. Holding either is like holding USD, so when you buy DLR.TO you already bought the USD value in CAD)

    At WealthSimple, when you sell some shares, you can't actually transfer the money to your bank account on the same day. The balance isn't available to transfer.

    I'm sure it can cause more problems for professional traders and institutional stuff, and even other ways it impacts us that I don't know about.

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  • [–] 2 points 11 months ago (1 child)

    Stocks on the Nasdaq and the rest of the USA exchanges are at T+1, transaction date plus one day. So they settle the next business day not in 2 to 3 days like you mentioned.

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  • [–] 2 points 11 months ago* (last edited 11 months ago)

    Dlr is canada and takes 3 days.

    And even a +1 day is a long time. And then there's weekends and holidays. So you could do something on Thursday, Fridays a holiday, so then it's Monday is the +1 and you are settled and complete on Tuesday morning.

    A lot can happen between a Thursday morning trade and Tuesday morning, and a lot can happen in a regular +1 day. The markets don't really care about non business days and shit happening.

    Same day within minutes settlement would be huge.

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    • [–] 12 points 11 months ago (2 children)

    That website is horrendous. I left.

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  • [–] 8 points 11 months ago (1 child)
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  • [–] 5 points 11 months ago* (last edited 11 months ago) (1 child)

    Some critics of the industry have warned that the frenzy around tokenization could introduce new systemic risks, especially in the absence of stringent regulation. In July, Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission who has frequently spoken positively about cryptocurrency, said tokenized securities would not be able to circumvent existing securities laws.

    “Systemic” is a banned word these days. But the current people in charge love systemic issues. They just don’t want you to clearly label them as such. Systemic issues disproportionately impact lower classes and minorities.

    This is why the word “woke” Had to be destroyed and turned into the non-word it is today.

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