Fidelity’s latest announcement comes as bad news for blockchain believers.
Tokenizing stocks has long been heralded as a prime use-case for crypto. Instead of buying a whole share in Apple, traders can tokenize it and buy fractions of a share instead. But Fidelity Investments, the largest online broker,with $8.3 trillion in assets, spread across 23 million accounts, now does that too—without the blockchain.
With the new “dollar-based trading” option, investors can buy a proportion of share, as little as 0.001, rather than buying the whole thing outright. There are no fees, either.
Blockchain promised to be revolutionary. But is it necessary? Image: Shutterstock.
“Customers can now own a piece of their favorite companies and ETFs based on how much they want to invest, independent of the share price,” head of Fidelity’s brokerage platform Scott Ignall said.
Other companies, like start-up Robinhood, also offer fractional trading. Robinhood offered the service as of December 2019. And bigger brokers, like Fidelity’s competitor Charles Schwab, will soon offer the service.
These offerings undercut some cryptocurrency companies that offer tokenized shares. DX.Exchange did so (before it ran out of money late last year), and Zilliqa and MaiCoin this month announced they’re launching Hg Exchange, which does a similar thing.
Several real estate firms have tokenized investments in properties. Just this month, BrickMark bought a property in Switzerland with crypto tokens, with plans to tokenize shares of the property to investors. But perhaps it’s already too late.