Dinari Obtains Regulatory Approval to Tokenize Stocks on the Blockchain
Dinari, a blockchain-based stock trading platform, has received regulatory approval to tokenize stocks, pending final approval from the Financial Industry Regulatory Authority. This license would allow Dinari to replicate the US stock market on the blockchain while adhering to securities laws. The company has registered with the Securities and Exchange Commission as a transfer agent, enabling them to distribute dividends and maintain records of securities ownership. Dinari’s flagship product, dShares, enables investors outside of the US to purchase shares of major US companies and exchange-traded funds using cryptocurrencies. These tokenized stocks are backed by real-world shares purchased by Dinari, with custody provided by Alpaca Securities and Interactive Brokers Group.
Key Points:
- Dinari has obtained regulatory approval to tokenize stocks on the blockchain.
- dShares allows investors outside of the US to purchase shares of major US companies and ETFs using cryptocurrencies.
- The tokenized stocks are backed by real-world shares purchased by Dinari.
- Custody for the actual equities is provided by Alpaca Securities and Interactive Brokers Group.
- The company has received investments from prestigious firms and backing from industry figures like Balaji Srinivasan.
Real-World Asset Tokenization Gains Momentum
Tokenization of real-world assets, like stocks, is gaining interest as it offers a more transparent and decentralized version of Wall Street. While previous attempts to tokenize US stocks faced regulatory scrutiny, Dinari aims to comply with regulations. Customers can purchase tokenized shares using stablecoins and earn dividends, although they do not have direct voting rights. All trades are recorded transparently on the blockchain, and the company plans to engage a third-party auditor for compliance. Challenges include limited token sellability and restricted trading hours to US time zones. Users must also hold the tokens in their own digital wallets as Dinari is non-custodial.
Hot Take
Dinari’s regulatory approval to tokenize stocks is a significant development in the crypto space. By adhering to securities laws and obtaining licenses, the platform aims to bring the benefits of blockchain to stock trading while maintaining compliance. The interest in real-world asset tokenization reflects the growing belief in the potential of blockchain technology to transform traditional finance. However, challenges such as limited sellability and trading hours need to be addressed for wider adoption. Overall, Dinari’s approach and partnerships demonstrate a commitment to building a regulated and transparent stock trading ecosystem on the blockchain.
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