Citadel Securities and BlackRock back new Texas-based national stock exchange

The new Texas Stock Exchange (TXSE) has raised nearly $120 million. The group behind the new TXSE has the support of market maker Citadel Securities and Wall Street’s BlackRock. The TXSE plans to challenge the New York Stock Exchange and Nasdaq. 

Reports show that BlackRock and Citadel Securities are behind the undisclosed firm. The firm plans to launch a new national stock exchange. Upon approval, the national stock exchange will be launched in Texas and will direct its focus on ETFs.

Also Read: Goldman Sachs, Citadel Securities, Citigroup, and UBS join BlackRock’s Bitcoin ETF

According to the reports, the undisclosed firm will file for registration with the U.S. Securities and Exchange Commission  (SEC) by the end of 2024. WSJ reported that Texas Stock Exchange (TXSE) has raised close to $120 million for the project.

The TXSE is reportedly going to focus on exchange-traded funds (ETFs). TXSE’s pursuit of ETF listings may have been fueled by the ongoing developments in the ETF market. The new exchange could provide an alternative solution in light of the approval of Bitcoin ETFs and the ongoing ETH ETF discussions.

BlackRock-backed TXSE to focus on ETF listings

The TXSE is looking to improve listing options within the United States. Specifically, the proposed Texas-based national stock exchange wants to offer affordable solutions, with many companies reporting increasing compliance costs at both the Nasdaq and the NYSE.

Exchanges like the Nasdaq, for instance, have reportedly imposed new rules that set targets for the company’s board diversity. Although necessary, such rules may easily deter some companies from listing and increase onboarding time. The TXSE is looking to simplify the listing process and provide its services at affordable costs with minimal hurdles.

The TXSE has been fronted as the national exchange that will place its focus on electronic-traded funds. The focus on ETFs comes as a relief for crypto-related ETFs currently being introduced to the market. The U.S. SEC approved Bitcoin ETFs this year, and they are already trading on the Nasdaq and the NYSE.

The U.S. SEC approves ETH ETFs

The U.S. SEC approved Bitcoin ETFs early this year. About five months later, the regulator also approved all eight Ethereum ETF applications. Prior to the approval, the industry was extremely skeptical of the ETH ETF approval. Many industry observers expected the U.S. SEC to reject the applications because it considers Ether a securities offering.

Also Read: Bitcoin ETFs Make 56% of Fidelity’s and 26% of BlackRock’s 2024 Inflows

The U.S. SEC approved eight ETFs from VanEck, Grayscale, Bitwise, Invesco Galaxy, ARK21 Shares, Fidelity, BlackRock, and Franklin Templeton. The regulator confirmed the applications were consistent with the Exchange Act.

Although the ETH ETFs are not yet tradable, pending further approvals, the SEC has confirmed the viability to the crypto community. Following these developments, BlackRock and Citadel Securities’ move to back a new Texas-based national exchange firm appears well calculated.

Texas is generally crypto-friendly, and BlackRock has shown major interest in cryptocurrency. Currently, its iShares Bitcoin Trust is the largest Bitcoin ETF. The joint launch of TXSE could be a major boost for crypto-related ETFs, as ETH ETFs are yet to hit the market.

Cryptopolitan reporting by Collins J. Okoth