Although it was a proof of concept, the broker highlighted that stock tokenisation can be used with existing UK client asset rules.
CMC Markets announced today (Thursday) that it has completed the private placement of a shareholding in the UK using distributed ledger technology (DLT), or in other words, it has tokenised stocks.
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The broker highlighted that the stock tokenisation has been implemented as a proof of concept. It further emphasised that such tokenisation can be used with existing UK client asset rules to move securities between investors safely.
Its corporate broking arm, CMC CapX, facilitated the placement of the hybrid shareholding, while StrikeX acted for the issuer to create the mirror token, reflecting the shareholding, on the Arbitrum Layer 2 blockchain.
Read more: Tokenised Stocks Are Here, but Do They Really Bring Added Value over CFDs?
“This project is a significant step in our digital strategy,” said Laurence Booth, Global Head of Capital Markets at CMC Markets.
“With StrikeX, we are embarking on a plan to tokenise securities and derivatives markets so that investors can trade 24/7. This collaboration between CMC CapX and StrikeX demonstrates the possibilities for services we can offer to issuers and professional investors. We will go further and create marketplaces that leverage the new technology and open new opportunities for investors as well.”
The entry of the London-listed firm into the tokenisation space did not come as a surprise, as FinanceMagnates.com reported earlier on its intentions to launch the now-trending tokenised stocks.
The pilot came at a time when stock tokenisation is gaining popularity globally. While Robinhood is the most prominent mainstream broker to launch tokenised stocks in its non-US markets, several crypto exchanges have also joined the race.
Coinbase is even seeking approval to launch tokenised stocks in the US.
CMC Markets launched CMC CapX, its capital markets platform, in 2022. It offers investors access to capital raisings, including IPOs and secondary placings. The platform also connects buyers and sellers with a range of unlisted investment opportunities.
Meanwhile, CMC took an initial stake in StrikeX in mid-2023, marking its move into blockchain technology. In May this year, it increased its stake from 33 per cent to a majority 51 per cent, gaining control over StrikeX’s technology and product direction.
Notably, the increased stake came after CMC wrote off its initial £2.8 million investment as unrecoverable.
“This marks a key step forward, moving from internal testing to real-world execution,” said Joe Jowett, CEO of StrikeX, on the latest tokenisation pilot.
“Our tokenisation engine has now been proven live in a Tier 1 regulated environment. While tokenisation is being trialled in many contexts, achieving it at this level with an established TradFi institution demonstrates readiness for large-scale adoption and provides a strong foundation for broader rollout.”
