The Boston Security Token Exchange AKA BSTX has cleared all the requirements necessary to operate as a National Securities Exchange.
On 27th January, the Securities Exchange Commission approved the Boston Security Token Exchange LLC (BSTX) to be a National Stock Exchange.
The stock exchange is a part of the Boston-based Boston Options Exchange.
Also, the SEC approves BSTX to run on a blockchain. This will make BSTX the first blockchain-based national security exchange.
What Is The Boston Security Token Exchange?
Box Digital Markets and tZERO co-own the BSTX platform.
Now that the SEC regulates the platform, it has to follow many rules.
This includes following strict regulations and maintaining transparency—Additionally, allowing everybody to access the BSTX platform.
The Security Token Exchange says that going public is raising complications for companies.
Additionally, technology-based small companies find it difficult to get investors in the traditional setup.
The BSTX says it wants to resolve this issue by being a National Stock Exchange.
Moreover, BSTX aims to use blockchain technology to encourage companies to go public. This will help them to reach new investors.
BSTX claims that its regulated status makes it a better option for companies to list themselves on the platform.
Furthermore, the company will provide corporate governance, investor protection, and price discovery.
Also, the exchange platform mentions that they are open to all participants. The securities exchange will see not only institutional investors but also small investors.
The securities exchange says that companies have the option to access a diversified base of investors.
The stock exchange wants to create a “path for listed companies that is less convoluted and with less friction.”
BSTX Will Work In Traditional Markets, Not Crypto Trading
The approval from the SEC will give the Boston Security Token Exchange the same status as other Stock Exchanges like NYSE or NASDAQ.
However, the approval by the SEC does not allow the stock exchange to be involved in crypto trading.
According to the SEC, the commission has noted that the stock exchange’s current approval does not involve digital trading tokens.
The Securities Exchange claims they will use blockchain technology to allow investors to have faster transactions.
These speedy transactions will happen on the same day (“T+0”) or the next day (“T+1”).
Currently, the settlement cycle in traditional markets is the standard two business-day settlement (“T+2”).
Right now, the Securities and Exchange Commission is debating whether crypto lending services should be considered securities.
The SEC is also reviewing some high-yielding crypto lending products offered by a few companies.