OKX and ICE give their tokenized-stock venue a start date as most big issuers opt out

OKXICE, the joint venture of crypto exchange OKX and New York Stock Exchange owner Intercontinental Exchange (NYSE: ICE), said on Wednesday, November 11, that its tokenized securities venue will open on Monday, November 23, according to reports by The Block and CoinDesk.

The venue will trade blockchain tokens that stand for shares, under the five-year innovation exemption the US Securities and Exchange Commission (SEC) introduced in September. The opening list leans on crypto companies, because most of the large companies first proposed said no.

The companies that said no, and the ones that signed up

The SEC's framework gives issuers 30 calendar days after receiving notice to object when an unaffiliated third party arranges the tokenization of their shares, CoinDesk reported. By its count, 56 of the 62 companies originally proposed objected, and total objections reached 67. The Block said a filing dated Thursday, November 5, showed 67 companies had opted out, including Meta Platforms, The Home Depot, Netflix, Tesla and Costco.

One of them, fiber-optic maker Applied Optoelectronics, said through a spokesperson that it was unsure how tokenization would affect its stock price, liquidity and volatility, The Block reported.

On the other side, OKXICE has confirmed 70 assets so far from issuers including Coinbase (Nasdaq: COIN), Circle (NYSE: CRCL) and Robinhood (Nasdaq: HOOD), as well as 59 exchange-traded funds, according to The Block. CoinDesk reported that more than 70 assets have been confirmed for round-the-clock trading, that the ETFs come from Direxion, and that Strategy (Nasdaq: MSTR) will have both its common and preferred stock listed. A spokesperson told CoinDesk that not all assets will be available at the start.

Andrew Cuomo, the former New York governor who co-chairs OKXICE, said: "The future of finance is onchain, and we have an opportunity to build it here in America," according to The Block.

Pools instead of an order book, and wallets the venue does not control

Trading will take place through Uniswap v4 liquidity pools on X Layer, OKX's Ethereum layer-2 network, CoinDesk reported. Such pools price trades from a pool of assets rather than by matching buyers and sellers in an order book. Securitize supplies the tokenization, which CoinDesk said is designed to keep shareholder rights including dividends, voting and participation in corporate actions.

Customers hold the tokens in self-custodial wallets, and OKXICE said it will not hold their assets or private keys, according to CoinDesk. Access starts with eligible US-based OKX Inc. customers who have completed identity checks and onboarding; The Block said users need a CeDeFi Wallet, OKX's self-custody wallet product.

CoinDesk reported that OKXICE is set to be the second venue to launch under the exemption. FinanceInTime has covered two other plans under the same framework: Formation's Solana venue and three ledger designs compared.

Not every exchange operator backs the exemption. Nasdaq plans to opt its own stock out of tokenized securities venues, The Block reported, citing an opinion piece in Barron's by John Zecca, Nasdaq's chief legal and regulatory officer, who wrote that "the Innovation Exemption allows tokenized securities to trade outside the government-regulated National Market System."

A launch built on consent the largest issuers withheld

We think the opt-out count says more about this venue than its launch date. A market where 56 of 62 proposed companies declined is, for now, a market in crypto-linked shares and ETFs, and that limits how much trading it can draw away from established exchanges.

The opportunity is a regulated, round-the-clock route to US shares with rights attached and keys left with the customer, which is the kind of product our line favors. The threat is thin liquidity in pools covering few large names, and the fragmentation Nasdaq warns about. We would watch whether any of the objecting companies reverse course after November 23; our reading would change if large issuers start opting in, and we make no forecast for the price of any token or share.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.