Trading for unaffiliated tokenized Nvidia stock launched on INX platform

bNVDA, an Ethereum ETH -0.48% -based tokenized security backed one-to-one by Nvidia stock but not officially associated with the chipmaker, was launched on Tuesday on the INX platform for eligible non-U.S. users.

According to a press release by tokenized security marketplace INX and tokenized real-world asset issuer Backed, the bNVDA token can be traded outside traditional stock market hours and allows users to fund their accounts and purchase the tokenized security with cryptocurrency.

"This partnership represents another milestone in our journey to enable the trading of real-world assets tokens. We are committed to advancing the accessibility and efficiency of the tokenized asset market, ushering in a new era of global finance," INX CEO Shy Data said.

The new token is not available for trading by U.S.-based traders. Although the tokenization of real-world assets is a growing sector at the intersection of digital assets and traditional finance, the U.S. Securities and Exchange Commission (SEC) has not yet adopted a regulatory regime specifically for blockchain-based securities. "The unclear regulatory landscape in the U.S. means that at present, Backed's tokens are not offered or marketed in the U.S. However, Backed's tokens are offered under an approved EU prospectus, are MiFID compliant, and covey ownership via blockchain ledgers," Backed Head of Marketing David Henderson told The Block.

Key benefits of tokenized Nvidia stock

According to the press release from INX and Backed, the benefits of using a tokenized security instead of investing directly in Nvidia stock include 24/7 trading, unrestricted by traditional market hours, and the ability to use tokenized stocks in decentralized finance applications or as collateral for loans.

"Crypto traders have been seeking a seamless bridge to the traditional market - and tokenized stocks provide exactly that, we envision a future where investors can build diversified portfolios of tokenized real-world assets directly on the blockchain," Backed Co-Founder Adam Levi said.

Henderson said the bNVIDIA token has no official affiliation with Nvidia . "Tokens are backed one-to-one by the stock, and users have the primary claim to the collateral value," they told The Block.

INX is a regulated marketplace for trading tokenized security tokens, accommodating both fiat and cryptocurrency transactions. Backed’s tokenized public securities are called bTokens and are ERC-20 tokens deployed on the Ethereum network .

Nvidia's stock (ticker NVDA) declined by 2.3% on Friday to close at $123.80, however, the chipmaker's stock is up 156% year to date and nearly 3,000% over the past five years.