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Nasdaq, in collaboration with Finnhub and Tiingo, will provide price feeds to DeFiChain, a DeFi platform built on the Bitcoin network.
Tokenized equities have had a rocky few months in terms of regulation, but that doesn’t appear to have stopped legacy financial behemoths and decentralised finance (DeFi) supporters from striking new collaborations.
Bloomberg reported today that Nasdaq, Finnhub and Tiingo will be providing their price feeds to DeFiChain, a DeFi platform built on the Bitcoin network.
DeFiChain allows users to trade tokenized equities that correlate to the underlying pricing of big publicly traded companies such as Tesla, Amazon, and Apple. The tokenized equities, which are similar to a now-withdrawn offering by Binance earlier this year, can be purchased in fractions without requiring investors to purchase a full, traditional share, which requires custody of a real share certificate.
The tokenized stocks are collateralized by cryptocurrencies, removing the need for an intermediary, and can also be purchased in the form of decentralized loans. The purchase of a tokenized stock, which is available for trading 24 hours a day, does not grant the bearer ownership of the underlying asset, but rather lets them to potentially profit from the asset’s price changes.
DeFiChain’s decentralised stock trading system makes use of its native token, DFI, as well as Bitcoin (BTC) and the USD-pegged stablecoin USD Coin (USDC). Julian Hosp, the platform’s co-founder, stated that the “offering will open the door to many people who are disappointed by existing markets.” However, proponents like Hosp will increasingly have to battle with regulators’ heightened interest in the DeFi domain.
The US Securities and Exchange Commission was revealed last week to be investigating Uniswap, the startup operating the world’s largest decentralised bitcoin exchange. In late July, the platform delisted dozens of tokens and tokenized stocks, citing mounting regulatory pressure.
Earlier that month, sales of Binance’s popular stock tokens, which represented fractions of equity shares in companies like Tesla and Coinbase, were abruptly halted in response to pressure from Hong Kong’s securities regulator and earlier reports that European and British regulators were scrutinising the offering for possible noncompliance with securities laws.