New US Stock Exchange Will Use The Blockchain To Track Trading Activity

The SEC granted the Boston Security Token Exchange regulatory permission this week.

This week, the Securities and Exchange Commission granted regulatory permission to America’s first blockchain-based stock exchange. The Boston Security Token Exchange (BSTX) might employ the new technology to enable speedier transaction settlements, according to a file the SEC released to its website late Thursday evening.

BSTX will offer same-day and next-day settlements, as opposed to existing exchanges, which generally take two days to settle a trade. It will also employ a private blockchain to provide a market feed that will allow members to view their own and others’ transactions anonymously.

Members won’t be able to exchange digital tokens. Thus it won’t be a new marketplace for buying and selling cryptocurrencies and other virtual assets.

BSTX director Jay Fraser told Reuters that the exchange hopes to allow trading of stock tokens later. BSTX had intended to focus only on tokenized securities, but the SEC had already rejected such intentions in a filing. Nonetheless, Fraser stated that the objective is to develop an exchange that resembles Coinbase rather than the NASDAQ or NYSE. Until then, when it opens in the first half of the year, BSTX will function more like a typical exchange.