Crypto Exchange Lykke, Dutch Market Nxchange to Build Tokenized Securities Trading Platform
The new project will enable companies to tokenize financial instruments including bonds and equities by using blockchain technology.
Swiss Lykke cryptocurrency exchange has teamed up with Nxchange, a Dutch operator for issuing and trading of securities, to set up a blockchain-based securities trading platform. The project will use distributed ledger technology (DLT) to tokenize a variety of financial instruments, Lykke said in a press release on Monday.
As part of the agreement, Lykke will invest an undisclosed amount of money in the Dutch company and will become an equity shareholder in Nxchange. The crypto exchange will provide the new platform with the needed blockchain technology and virtual asset trading infrastructure, Lykke explained in the statement. The forthcoming trading venue will follow Dutch financial rules as Nxchange is a Multilateral Trading Facility (MTF) regulated by the Ministry of Finance of the Netherlands.
“This partnership will see the potential for any asset or security – equities, bonds, loans, investment products, etc. – to be tokenised and traded on the blockchain infrastructure all within an MTF regulated and compliant environment,” Lykke said in the press release.
Blockchain will also allow companies to issue and offer investors non-banking assets that are currently inaccessible on traditional stock markets, Lykke said. By utilizing smart contracts, the upcoming tokenization platform will guarantee investor rights including dividends, asset ownership and voting rights.
Smart contracts are DLT-based automatically generated contracts that can track all activities and speed up the deal-making process. The forthcoming blockchain-based tokenization trading platform of the Swiss Stock Exchange (SIX) will implement similar solutions.
“New blockchain technology and smart contracts used in the crypto markets becomes vastly cheaper, quicker, more accessible and more secure compared to traditional methods of exchange such as the incumbent stock exchanges and trading platforms provide,” Lykke said in the press release.
“By the use of a new infrastructure to handle transactions between two parties, investors will become fully empowered to take control of their financial strategy,”
Lykke and Nxchange neither revealed the exact date when they would launch the new project nor whether Lykke token will be integrated in some way in the project. The coin, LKK, is one of the relatively small cryptos as it ranks number 1242 in the cryptocurrency market capitalization list with $12,446 in value.