Image source: 123rfDinari , a blockchain-based stock trading platform , has received regulatory approval to tokenize stocks.The license, which is subject to final approval by the Financial Industry Regulatory Authority , will allow the company to replicate the U.S. stock market on the blockchain, within securities law, Bloomberg reported Monday . Says.According to the report, Dinari is registered with the Securities and Exchange Commission as a transfer agent, which allows it to perform important tasks such as distributing dividends and maintaining the ownership records of securities .Founded in 2021, Dinari last week announced its flagship product, the Dinari Securities-Backed Token (dShare) .These tokens will allow non-US investors to use their cryptocurrencies to buy shares in major US companies and exchange-traded funds (ETFs), including Tesla , Walt Disney , and Nvidia .The Shares platform operates under Regulation S, which allows SEC-compliant sales of securities to foreign investors.Of note, Dinari’s tokenized shares are backed by real-world shares purchased by the company. Alpaca Securities and Interactive Brokers Group provide physical stock custody.The company has also received investment from top companies including Susquehanna International Group and backing from industry luminaries like former Coinbase Global executive Balaji Srinivasan.“A lot of people, especially in the crypto world, are afraid of regulation. And in many ways, they shouldn’t be,” said Dinari co-founder and CEO. Gabriel Otte said in an interview.He pointed out that the highly regulated American stock exchange had flourished since the 1920s, becoming the most robust securities market in the world.
Real-world asset tokenization gains momentum
Dinari’s project began amid growing interest in tokenizing real-world assets.Proponents believe that tokenization can create a more transparent and decentralized version of Wall Street .While pioneering efforts to tokenize US stocks like the Mirror Protocol have faced regulatory scrutiny, Dinari aims to follow the rules.Customers authenticated with the “know your client” rule will be able to purchase tokenized stocks using stablecoins like USDC.Furthermore, while token holders can receive dividends, they do not have direct voting rights as shareholders.Dinari collects a fee on every purchase, and all transactions are transparently recorded on the blockchain. The company is considering hiring a third-party auditor to ensure compliance.But there are also challenges the company faces in replicating the functionality of the world’s largest stock market.One is that stock token holders can only sell their tokens to Dinari.Additionally, token purchases are limited to US trading hours and Dinari is non-custodial, requiring users to hold the tokens in their digital wallets.“Dinari’s ultimate goal is to operate an exchange where these securities can be traded using broker-dealer licenses,” Chas Rampenthal, Dinari co-founder and chief legal officer, said in an interview. I was.Analysts at global investment bank Citi believe that the rise of CBDCs and the tokenization of real-world assets will drive the next wave of mass adoption of blockchain technology.