BlackRock and Citadel Securities have invested in a group aimed at disrupting the US stock market.
Chairman and CEO of the Texas Stock Exchange, James H. Lee, raised $120 million from more than two dozen investors to launch an exchange to compete with the New York Stock Exchange and Nasdaq. The investor consortium includes the world's largest asset manager, BlackRock, and giant market maker Citadel Securities.
Are BlackRock and Citadel planning a blockchain move into stock markets?
According to the Wall Street Journal, the TXSE envisions itself as a challenge to the dominance maintained by traditional and perhaps outdated exchanges. The group also wants to address rising compliance fees and listing costs.
While neither BlackRock nor Citadel have indicated a cryptocurrency-related strategy with the TXSE investment, blockchain technology may be a viable solution to the agenda outlined by Lee's group.
Blockchain networks are known to operate energy efficient models compared to the traditional financial sector. Naysayers and nonbelievers have scrutinized Bitcoin's (BTC) proof-of-work (PoW) architecture over the years as being energy-intensive, but the data varies.
Galaxy Digital 2021 Report Quote Bitcoin consumes less than 50% of the energy used by banking systems, Nasdaq said. Given that top altcoin chains like Ethereum (ETH) and Solana (SOL) use a more power-optimized architecture with Proof of Stake (PoS), decentralized chains can afford the operating costs of TXSE.
Introducing on-chain mechanisms to the world's largest capital market could also open up access to 24/7 trading and instant settlement. The stock market operates only five days a week. Anyone around the world can buy BTC, ETH, or SOL whenever they want, provided that the chain's uptime remains uninterrupted.
Bitcoin, in particular, did not do this Experienced Down for more than a decade, Ethereum is arguably Defi's most trusted blockchain, with a total value of over $66 billion locked per DefiLlama. The tokenization of real-world assets such as bonds and stocks has also risen dramatically in recent years to a market worth $9.4 billion and growing, suggesting that bringing in stocks and other securities is possible.