BitGo and OTC Markets explore tokenised stock trading across 150-plus broker-dealers

Key points

BitGo and OTC Markets Group have announced an intention to explore a strategic alliance, with no binding commitment made by either company as of the announcement.
The collaboration targets OTC Link ATS, an SEC-regulated alternative trading system used by more than 150 broker-dealers.
Phase one would cover digitally native securities issued under exemptions such as Regulation D, already trading on venues like tZERO and Figure Securities.
Phase two, contingent on regulatory developments, would tokenise the OTC stocks at the core of OTC Markets' business, with BitGo Bank and Trust holding underlying securities and issuing entitlement tokens under its OCC national trust bank charter.
The proposed structure mirrors the DTC model, where Cede & Co holds shares and investors hold book-entry entitlements, suggesting BitGo could serve as a depository equivalent for the tokenised layer.

BitGo and OTC Markets Group have announced an intention to explore a strategic alliance centred on bringing digital asset custody and trading to the OTC Link alternative trading system (ATS), a Securities and Exchange Commission (SEC)-regulated venue currently used by more than 150 broker-dealers. No binding commitment has been made by either party; the announcement is written entirely in the conditional and maps out an architecture rather than a live product.

The proposed collaboration has two distinct phases. In the near term, the focus would fall on digitally native securities, meaning tokens already issued under existing regulatory exemptions such as Regulation D, the kind that currently trade on venues including tZERO and Figure Securities. The longer-term ambition would extend to tokenised versions of the over-the-counter stocks that form OTC Markets’ core franchise, though that phase is explicitly contingent on regulatory developments not yet in place.

The structural model described for the second phase draws a direct parallel with how the Depository Trust Company (DTC) operates today. Under that model, BitGo Bank and Trust, a nationally chartered trust bank operating under an Office of the Comptroller of the Currency (OCC) charter, would hold the underlying securities and issue tokens representing investor entitlements to them. The arrangement would effectively position BitGo in a depository-like role for the tokenised layer of an OTC market segment that neither party characterises as well-served by existing infrastructure.

For operators, the more consequential signal is structural rather than immediate. If this architecture advances, it would introduce a privately operated, token-native settlement layer into a segment of the US equities market that currently lacks one, with OCC oversight providing the regulatory anchor. Whether regulatory conditions materialise in time to enable the second phase remains the central variable to watch.

What this means

infrastructure & platform: The depository-parallel model described here clarifies what the winning settlement architecture for tokenised equities may look like in the US: a chartered trust bank holding underlying assets and issuing on-chain entitlements rather than a pure blockchain-native structure. Platforms building custody or clearing integrations for tokenised securities should stress-test their designs against this OCC-anchored model, since it appears to be the template regulators are likely to recognise.
distribution & BD: OTC Link's existing network of 150-plus broker-dealers represents a pre-assembled distribution layer that no pure-crypto venue has yet reached; if the alliance progresses even to the near-term phase covering Regulation D tokens, the addressable liquidity pool for digitally native securities expands materially. Firms originating or distributing private-market token issuances should assess whether establishing a presence on OTC Link ahead of formalisation would improve secondary-market prospects for upcoming deals.
regulatory & policy affairs: Phase two is explicitly staged behind unspecified regulatory developments, making this announcement a marker of where industry expects rulemaking to land rather than evidence it already has. Tracking what specific regulatory conditions OTC Markets and BitGo are waiting on would sharpen any assessment of the timeline risk attached to the broader tokenised-equity thesis in the US.
collateral & funding desk: If OTC-market stocks become tokenised and settleable through an OCC-chartered trust structure, their eligibility as collateral in digital-asset financing arrangements becomes a live question worth modelling now, before the framework is finalised, given how long internal credit and legal approval cycles typically run relative to market development.

Original source

Ledger Insights

ledgerinsights.com

BitGo and OTC Markets explore tokenised stock trading across 150-plus broker-dealers

Key points

Original source

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