Ondo Finance urged the US Securities and Trade Fee (SEC) to delay or reject Nasdaq’s proposal to commerce tokenized securities, saying it lacks transparency and will give established market gamers an unfair edge.
In a Wednesday letter to the regulator, Ondo — a blockchain firm that points tokenized variations of conventional belongings — mentioned regulators and traders can’t pretty consider Nasdaq’s proposal with out public particulars on how the Depository Belief Firm (DTC) will deal with blockchain settlements. DTC serves as the primary depository for US securities and facilitates their post-trade settlement.
Whereas acknowledging assist of Nasdaq’s transfer towards tokenization, Ondo warned that “Nasdaq’s reference to personal data implies differential entry that deprives different corporations of a good alternative to remark.”
The corporate additionally famous that Nasdaq’s rule can’t take impact till DTC finalizes its system, saying there’s no hurt in delaying approval till extra options are launched. It referred to as on the SEC to prioritize “open collaboration and clear requirements” earlier than making a remaining determination.
Ondo’s letter responds to Nasdaq’s Sept. 8 submitting with the SEC, by which the world’s second-largest inventory alternate sought to amend its guidelines to permit buying and selling in tokenized securities.
Tokenized shares are digital variations of conventional shares recorded on a blockchain.
If authorized, the proposal would let tokenized shares commerce alongside conventional ones, with settlements processed by way of the DTC’s forthcoming system for tokenized securities.
Nasdaq’s proposal was printed within the Federal Register on Sept. 22, beginning the SEC’s 45-day overview interval, which runs till early November or late December if prolonged.
Associated: $250M Ondo Catalyst fund indicators ‘arms race’ for RWA tokenization
The push for tokenized shares
The continued debate in regards to the tokenization of Nasdaq shares is occurring whereas a number of platforms have already listed or are planning to listing tokenized variations of US equities.
On June 30, Robinhood launched a layer-2 blockchain to assist buying and selling tokenized US shares and ETFs for European customers. The platform mentioned it will listing over 200 US equities and funds as onchain tokens.
Buying and selling platform eToro additionally introduced plans to launch tokenized shares as ERC-20 tokens on Ethereum. The corporate mentioned the rollout will embrace 100 widespread US-listed shares and ETFs, obtainable to commerce 24/5.
Kraken can also be following the development. The crypto alternate launched a tokenized securities platform in September, making tokenized shares obtainable to eligible prospects in Europe.
Galaxy Digital warned that the continued tokenization push might threaten the New York Inventory Trade’s dominance, saying in July that it challenges the liquidity of conventional markets.
Journal: Robinhood’s tokenized shares have stirred up a authorized hornet’s nest
