STS Digital Takes Its Crypto Options Desk Into Tokenized Stocks and Gold

STS Digital began offering over-the-counter options on tokenized stocks, ETFs and commodities today (Wednesday). The Bermuda-regulated trading firm is moving beyond crypto and said it will quote those contracts around the clock, including when US markets are closed.

Eligible clients can also post tokenized gold or equity ETFs as collateral against crypto options in the same account, STS said. CEO Maxime Seiler put on-chain real-world assets at around $40 billion, in line with the $39.61 billion RWA.xyz showed as of November 9.

Stocks and gold are a smaller slice. Tokenized stocks stood at $4.63 billion on October 28, Token Terminal data show, and Tether Gold and PAX Gold at about $4.9 billion combined, RWA.xyz shows.

Together that is about a quarter of the total, by FinanceMagnates.com's calculation.

London's trading industry is coming home!

Gold and Stocks Move Past Market Hours

Other firms added parts of the same package this year, each on a different product. Flow Traders opened a 24-hour desk for permissioned institutions in March, while CME Group moved its one-ounce gold futures to continuous trading in July.

Tether's gold token was among the first products on the Flow Traders desk. At CME, contracts with about $60 million in notional value changed hands in the first weekend.

On margin, Binance extended collateral support in September to selected bStocks, its tokenized shares, for Cross Margin and Portfolio Margin accounts. Binance said the tokens had crossed $1 billion in assets by October 15.

STS said it will put dealing, options and margin in one account and act as the counterparty on every trade.

Tokens Become Collateral for Institutional Clients

"Tokenised, the same asset moves like a stablecoin," Seiler said. "That makes it collateral."

The offer is limited to eligible institutional and professional clients, and availability varies by jurisdiction. That keeps it outside the retail broker market that FM Intelligence's Ask FMIQ covers through volume, fine and website traffic data.

Clients can reach the products through STS's trading desk, client portal or API, and settle in stablecoins or the relevant tokens, the company said.

Available strategies include calendar spreads, butterflies, strangles and straddles. The first set of underlying assets covers major US index ETFs, large-cap equities, FX, gold and oil.

STS holds a Class F license under Bermuda's Digital Asset Business Act and is supervised by the Bermuda Monetary Authority (BMA). The island set up its digital asset rules in 2018 and said in January it would work with Circle and Coinbase to move its economy on-chain.

STS said every token it lists goes through internal due diligence on the issuer, backing and redemption structure, reserves, custody and liquidity. It plans to add more single stocks, structured products and asset classes as liquidity develops.

STS raised $30 million in February from investors including CMT Digital and Kraken parent Payward, and introduced cross-asset portfolio margining for its crypto options in August.