Overstcok.com’s subsidiary tZero announced on Tuesday a partnership with BOX Digital Markets to create a regulated exchange for trading security tokens, which represent blockchain-based digital forms of real-world assets like company shares, real estate, or bonds.
The two organizations have set up a 50/50 joint venture to create the exchange. Overstock founder and CEO Patrick Byrne told Reuters the exchange could start operating during the third quarter of this year.
If the venture gets greenlighted by the US Securities and Exchange Commission (SEC), the new platform will become the first regulated security token exchange.
The project is led by Lisa Fall, CEO of BOX Digital and president of BOX Options Exchange. Box Digital is a subsidiary of financial services provider BOX Holdings Group, whose operations include equity options marketplace BOX Market.
Byrne praised the application of blockchain in the upcoming security token exchange, saying:
“The introduction of this technology is likely going to be controversial because it’s so much better than the current technology that the capital market is built on.”
“Going hand in hand with a blue-chip partner like BOX would be a great advantage for us,” he added.
tZero revealed it would contribute cash and provide its blockchain technology, while BOX Digital would offer its expertise and personnel to get approval from regulators.
Fall said that Overstock’s tZero had demonstrated its expertise in the development and application of blockchain for capital markets.
“tZero’s track record and accomplishments in this innovative area, coupled with BOX’s expertise in operating a highly efficient and transparent equity options marketplace, made partnering together an easy decision and we look forward to building a world-class platform for listing and trading security tokens,” she commented.
The newly appointed CEO of tZERO, Saum Noursalehi, said that the two companies would work with the SEC to get approval to create “a first-of-its-kind platform that will integrate blockchain capital markets into the current US National Market System.”
Last year, Byrne was considering the sale of his Overstock stake to start a blockchain project for registering land ownership.