The digital token market may be about to become a little bit more like Wall Street.
tZero, a subsidiary of online retailer Overstock.com Inc., is joining with Argon Group and RenGen LLC to form a digital tokens exchange that Overstock Chief Executive Officer Patrick Byrne said will be the first in compliance with Securities Exchange Commission and Financial Industry Regulatory Authority guidelines.
There’s a pipeline of about $2 billion in digital assets sold through initial coin offerings waiting to start trading, with the first tokens expected to list in the fourth quarter, the companies estimate. Byrne’s long-term bet is that all securities will eventually be tokenized and trade using blockchain technology. An exchange that falls under the SEC umbrella is a step toward that.
(Related: Will Bitcoin Ever Be a Fiduciary Asset?)
“It’s a cleaner, more efficient, less expensive market,” Byrne said Tuesday at tZero’s offices in New York. “It will start with ICOs, but all the forces of economics will drive blue-chip issuers to this, and eventually we’ll see the first McDonalds or GM tokens. This isn’t going to stay a novelty.”