this post was submitted on 04 Sep 2023
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chapotraphouse
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The problem here is that the vast majority of crypto trading occurs "off chain". Meaning via intermediaries like Coinbase, which trade on internal databases, exactly like existing securities. The history of crypto is full of examples of exchanges doing exactly this sort of market manipulation. Not to mention insider trading, front running their order books and maintaining fractional reserves.
The elimination of fraud would remain a social and legal issue, the technology used to keep the books just isn't important. If the government can't prevent a specific type of fraud now, it wouldn't be able to with tokenized securities either.
This would be an objectively good thing for retail traders in a few ways, though there'd be some hilarious issues from making stocks into digital bearer bonds - what do you do if I steal your Google coins, or if you die while holding them in a wallet with a lost key? Any answer that's not "too bad lol" can only mean giving terrifying power to a DAO - or right back to the SEC
Maybe not over the stock market, but they certainly had enough to send a lot of web 3 nerds running