USA Securities Exchange Board gives the nod for BSTX blockchain settlements on traditional markets


USA Securities Exchange Board gives the nod for BSTX blockchain settlements on traditional markets


According to the latest reports, the Boston Security Token Exchange (BSTX), which is a new facility of the Boston-based BOX exchange, has received regulatory approval from the United States Securities and Exchange Commission (SEC) for operating as a blockchain-based securities exchange. 


BSTX had been launched in a joint collaboration with BOX and Overstock’s blockchain arm, tZERO, which has been originally seeking approval to launch publicly-traded registered security tokens


However, the approval from US SEC for operating as a national securities exchange has allowed BSTX to use blockchain technology for making faster settlements in traditional markets.


The SEC has said that the Commission has made a note of the BSTX Exchange initiating a current proposal, highlighting that does such a proposal does not include the trading of digital tokens or other additional use of blockchain technology.


While the SEC had previously denied BSTX the permission of offering crypto-focused services, the latest approval has given the approval to facility for using a proprietary market data feed, i.e., the BSTX Market Data Blockchain.


Additionally,, BSTX would also use blockchain technology for helping investors experience faster transaction times within the same day (“T+0”) or the following day (“T+1”), instead of the regular standard two business-day (“T+2”) settlement cycle, which is sported by traditional markets.


Along with the regulatory approval that is based on BSTX’s rule change proposals (SR-BOX-2021-06), the SEC had placed four conditions for BOX that align with BSTX’s operations. 


The requirement also includes joining all relevant national market system plans that are related to equities trading, and ensuring Regulatory Services Agreement with FINRA, an applicable structure of governance and Intermarket Surveillance Group membership for the BSTX facility.


In alignment with the above developments, the SEC has also been reviewing some of the high-yield crypto lending products that are offered by Celsius Network, Gemini, and Voyager Digital.


The SEC is also conducting an inquiry to consider the registration of crypto lending services as securities. The latest Bloomberg report on the same matter has suggested that the SEC’s main concern is within the high-yield offering by crypto lending services.

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