Crypto exchanges are looking for ways to expand their domains, and it seems that the blockchain space is no longer enough. Now, the U.S. subsidiaries of FTX and Bitstamp could be about to start offering their customers support for equity trading. According to a report from Bloomberg, both exchanges are fine-tuning details to enter the world of traditional finance. If their plans come to fruition, both FTX and Bitstamp would offer services diverse enough for their customers to concentrate a significant amount of their wealth under their custody. Crypto Meets Stocks It is unclear whether both platforms want to apply to become stock exchanges or brokers, however it is important to note that although both require a tedious regulatory process, the general consensus is that it
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Felix Mollen considers the following as important: AA News, bitstamp, FTX Exchange, Wall Street
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Crypto exchanges are looking for ways to expand their domains, and it seems that the blockchain space is no longer enough. Now, the U.S. subsidiaries of FTX and Bitstamp could be about to start offering their customers support for equity trading.
According to a report from Bloomberg, both exchanges are fine-tuning details to enter the world of traditional finance. If their plans come to fruition, both FTX and Bitstamp would offer services diverse enough for their customers to concentrate a significant amount of their wealth under their custody.
Crypto Meets Stocks
It is unclear whether both platforms want to apply to become stock exchanges or brokers, however it is important to note that although both require a tedious regulatory process, the general consensus is that it is easier to be a broker (like Robinhood) than an exchange (like Nasdaq).
Both FTX and Bitstamp had signaled their interest in penetrating the stock market in the past, so the reports confirm speculation about the business model the exchanges wanted to adopt.
In an interview shared by Bloomberg, Robert Zagotta, CEO of Bitstamp USA indicated that the exchange was interested in offering stock trading options, but his words made it apparent that it was all merely exploratory:
“(The stock market is a) very competitive space, and there are some very significant players in it; we have to be convinced that we have a right to win in this space.”
He said that should it decide to expand, Bitstamp USA could focus on partnerships or acquisitions to speed up the regulatory process.
For its part, FTX US took a more direct and aggressive approach.
In a tweet on January 11, 2022, FTX US CEO, Brett Harrison, asserted that the stock market was a priority for the company
We’re hard at work on stocks! Features we’re planning for day 1:
-Live BBO and historical candles
-Stock screening/search functionality
-Basic fundamentals (market cap, P/E ratio, dividend yield)
-Portfolio performance tracking, order/trade detailsWhat else should we have? pic.twitter.com/q2bTpsfuna
— Brett Harrison (@Brett_FTXUS) January 11, 2022
Tokenized vs Real Stocks
It is important to note that FTX had already played with the stock market, offering its customers the opportunity to trade tokenized stocks on the blockchain representing the price of major SP500 companies. However, regulatory pressure negatively impacted these products.
Other exchanges sidestepped the issue. Binance, for example, offered the opportunity to trade tokenized stocks last year. However, it started with Tesla and withdrew its product three months later due to several warnings from U.S. regulators.
Bloomberg contacted Binance to find out if it expected to enter the stock market, but the exchange said it was focused on the crypto market for the time being.
Coinbase declined to respond, although the company recently acquired a derivatives exchange, so it could be easier for analysts to map its business interests a bit.