New Texas Stock Exchange Gets Backing from BlackRock and Citadel, Aims for 2025 Launch

4 months ago 57

The Wall Street Journal (WSJ) reported that a group backed by Wall Street giants BlackRock and Citadel Securities is launching a new national stock exchange in Texas. Texas Stock Exchange (TXSE) aims to challenge the regulatory environment of the New York Stock Exchange (NYSE) and Nasdaq.

This move seeks to capitalize on rising dissatisfaction with compliance costs at the Nasdaq and NYSE, offering a more CEO-friendly environment.

TXSE Garners Strong Support from Financial Giants for 2025 Launch

Despite the dominance of NYSE and Nasdaq in US corporate stock listings, TXSE’s backers, including Citadel Securities and BlackRock, provide significant support. These firms have previously supported other upstart exchanges, like Members Exchange (MEMX).

A Citadel spokesperson confirmed that the company is an investor in TXSE. Furthermore, James H. Lee, Chairman and CEO of TXSE, has also confirmed both firms’ involvement in this project in his LinkedIn post.

“We are thankful for the support of our more than two dozen investors, including some of the largest financial institutions and liquidity providers in the world, such as BlackRock and Citadel Securities, as well as prominent business leaders from around the country. With approximately $120 million of capital raised, TXSE is expected to be the most well-capitalized exchange entrant to file a registration with the US Securities and Exchange Commission,” Lee wrote.

TXSE has secured approximately $120 million from investors. It also plans to file registration documents with the US Securities and Exchange Commission (SEC) later this year. Operations are expected to start in 2025, with the first listing planned in 2026.

The exchange will be entirely electronic but physically present in Dallas. It also aims to compete for primary and dual listings, including exchange-traded products.

Texas has been actively seeking to attract more financial business, and establishing Texas Business Courts as an alternative to the Delaware Court of Chancery system highlights the state’s growing importance.

For instance, Tesla is considering moving its incorporation from Delaware to Texas following a controversial court ruling. This development could further enhance Texas’s reputation as a major financial center.

“Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the US present incredible opportunities for businesses—and ultimately the TXSE,” Lee opined.

The crypto community enthusiastically welcomed this latest development, particularly given that BlackRock CEO Larry Fink expressed his optimism about Bitcoin exchange-traded funds (ETFs) and the potential of tokenizations. Following the iShares Bitcoin ETF launch in January, Fink emphasized the potential of ETFs to revolutionize all financial instruments.

He discussed a major architectural change at BlackRock, integrating iShares’s ethos and philosophy into the entire company. This reflects their belief that the ETF revolution is only halfway complete.

Fink drew parallels between ETFs and Bitcoin as technologies for asset storage. He envisioned every stock and bond having its own unique identifier on a general ledger, allowing for individualized investor identification and eliminating issues related to illicit activities.

“But the most important thing is we could customize strategies through tokenization. That is, if it’s every individual, we would have an instantaneous settlement. Think about all the costs of settling bonds and stocks. But if you had a tokenization, everything would be immediate because it’s just a line item. And so we believe this is a technological transformation for financial assets,” he outlined.

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