Always amazed what scams and traps crypto community comes up with next.
Cryptocurrency exchanges begin offering tokenized securities
21–30 of 68 posts
Re: Cryptocurrency exchanges begin offering tokenized securities
#22One thing to note for people who don't have a securities background is that exchanges have offered "depositary receipts" which is essentially the same thing for some time - the innovation here is making the depositary receipt into a crypto token. Depositary receipts are used typically to provide a secondary listing for a stock outside the country of its primary listing. So for example on Nasdaq I can trade a "Vodapho…
ADRs are largely a US thing, as far as I know. For example, many US companies list on European exchanges as a secondary listing using their US ISIN, not as an EDR.
Re: Cryptocurrency exchanges begin offering tokenized securities
#23Always amazed what scams and traps crypto community comes up with next.
All aboard the rage train !
Re: Cryptocurrency exchanges begin offering tokenized securities
#24Yeah.. as long as a judge can say that a security belongs to party X and not to the owner of tokens... tokenized securities are useless, they could just be a database record.
Normal stocks exist in a similar way for 99% of people. You don't own them directly you're the 'beneficial owner' and your ownership is just a database entry in your broker's database backed up contractually. It's the legal hack that lets you just press buy or sell and have it happen almost instantly instead of taking days to move around the paper stock certificates from one vault to another. Even if you go through the trouble of direct registration it's still basically a database entry.
Re: Cryptocurrency exchanges begin offering tokenized securities
#25One thing to note for people who don't have a securities background is that exchanges have offered "depositary receipts" which is essentially the same thing for some time - the innovation here is making the depositary receipt into a crypto token. Depositary receipts are used typically to provide a secondary listing for a stock outside the country of its primary listing. So for example on Nasdaq I can trade a "Vodapho…
Would tokenized shares remove the need for VIEs and contractual custodians in the Cayman islands for Chinese ADRs?
Re: Cryptocurrency exchanges begin offering tokenized securities
#26When this whole thing crashes to the ground it will the digital equivalent of tulip bulbs of Netherlands.
I thought the same, but... I don't think it will ever go down. Stock prices are already divested from the company fundamentals, but they can only get so high, so the next _logical_ step would be to create something entirely divested from the stock prices itself. Enter tokenized stock.
Not really. Some markets are. But when NASDAQ100 trade at PE = 30 I do think it is reasonably discounted cash flow under growth assumptions.
But you can trade EU, FTSE100, EM, etc. at a PE range of 15-20. While this is not historically cheap, it is also ont over-rated.
Re: Cryptocurrency exchanges begin offering tokenized securities
#27When this whole thing crashes to the ground it will the digital equivalent of tulip bulbs of Netherlands.
Tulip mania lasted 3 years: 1634-1637 in part of a single country. Surely we should keep comparing it to a decades old globalized financial system with formalized state support from many nations and a market cap measurable in the trillions.
"Market cap" as applied to cryptocurrency is a completely fake metric that exists only because it produces viral big numbers. Cryptocurrencies don't have a market capitalization, because they don't represent fractional ownership of any asset; there's absolutely no reason to think that multiplying the most recent price of 1 ETH by the notional supply of 120 million produces a good estimate of the Ethereum network's aggregate value.
Re: Cryptocurrency exchanges begin offering tokenized securities
#28Earlier quoted context omitted.
If you can shift these tokens around like Bitcoin my first thought was tax or sanctions evasion. Buy some VOO tokens from a 3rd party since you know your corrupt government (and you made money from that corruption) will seize your bank account for any reason. You hold these tokens in a private wallet stored somewhere for a few decades as your escape plan. There was an article on how cut-throat (pun intended) low the…
If you don't trust your own government, but the US government and financial institutions, couldn't you just open a US brokerage account? And conversely, if the US government doesn't want you as a shareholder (and by extension US financial institutions can't serve you), good luck to anyone trying to (knowingly or negligently) redeem any VOO that you've touched.
Governments are more practiced at blocking money from moving around with traditional services like banks with crypto they have a tougher time locking down the avenues because anyone offering $LOCAL_CURRENCY to crypto is a place money can leak out of the country around traditional money controls.
There's a reason real estate is one of the more popular ways for chinese nationals to move large amounts of money abroad, it's one of the less restricted ways to move large sums of money out of the country. So there's a lot of interest in expensive real estate not for occupation but just to buy to get cash out of the country into a stable asset that can be sold or borrowed against.
Re: Cryptocurrency exchanges begin offering tokenized securities
#29I assume customers will by buying into this stuff with stablecoins, which have the amusing property of being nonvolatile until the day their value plunges to zero over the course of a few minutes.
Have you looked at DEI / MakerDAO? They appear to be quite stable. But they are over collateralized as a stable coin should be.
Also the dollar backed ones would only fail if the foundations behind them fail (Eg. USDC)
Re: Cryptocurrency exchanges begin offering tokenized securities
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