CMC Markets Explores Tokenised Asset Launch
CMC Markets, listed as CMCX on the London Stock Exchange, has hinted at an upcoming launch of tokenised assets through its capital markets division, CMC CapX. This move aligns with recent initiatives by Robinhood and various crypto exchanges introducing stock tokenisation services.
The London-based company also revealed plans to leverage its collaboration with StrikeX Technologies to facilitate its asset tokenisation strategies. According to a LinkedIn post by CMC CapX, the firm aims to convert real-world investment opportunities, such as shares in private companies, into digital tokens on the blockchain.
Tokenised Assets on the Capital Markets Platform
CMC Markets unveiled CMC CapX, its capital markets platform, in 2022. This platform grants investors access to capital raisings, including initial public offerings (IPOs) and secondary placings. Moreover, it serves as a marketplace connecting buyers and sellers with a diverse range of unlisted investment prospects.
These capital markets services complement CMC’s core offering of contracts for differences (CFDs). The brokerage firm also delivers institutional services, encompassing trading infrastructure and technology. Notably, one of its prominent clients, Revolut, a well-known financial technology company in Europe, utilizes CMC Connect’s infrastructure to provide CFD products across three countries.
Market Expansion through Blockchain Technology
Earlier this year, CMC Markets initiated its foray into blockchain technology by acquiring an initial stake in StrikeX. Subsequently, in May, it increased its ownership from 33% to a controlling 51%, thereby gaining authority over StrikeX’s technological advancements and product roadmap.
Despite previously writing off a £2.8 million investment in StrikeX as irrecoverable, CMC affirmed its commitment to supporting the strategic objectives of the blockchain technology company. This recent development underscores CMC’s dedication to its blockchain investment objectives and signifies tangible progress in this domain.
Embracing the Trend of Tokenised Assets
Recent announcements by Robinhood, a popular commission-free brokerage platform, about its intention to offer tokenised stocks in Europe underscore the growing traction of tokenised assets in the financial markets. Other industry players like Kraken, Gemini, and Bybit are already providing tokenised trading options, reflecting a broader industry trend.
While tokenised stocks present several advantages such as 24/7 trading, expedited settlement processes, and increased market accessibility, concerns have been raised regarding their structural underpinnings. Anton Golub, the Chief Business Officer at Freedx, a Dubai-based crypto exchange, highlighted that tokenised stocks essentially represent derivatives tracking actual equities, raising questions about their equivalence to traditional equity ownership.
Moreover, the efficacy of round-the-clock trading access has been contested, with observations noting decreased liquidity outside regular trading hours. This ongoing debate underscores the need for regulatory clarity and industry-wide consensus on the operational frameworks of tokenised financial instruments.
Overall, CMC Markets’ strategic move towards tokenised assets aligns with broader industry trends, reflecting a paradigm shift towards digitisation and blockchain integration in traditional financial markets.
