Intercontinental Exchange to invest up to $2 billion in Polymarket

Key Points

• Intercontinental Exchange is planning to invest up to $2 billion in Polymarket, enhancing collaboration on future tokenization initiatives.
• Polymarket offers a platform for users to buy and sell shares on potential event outcomes, facilitated by peer-to-peer smart contracts.
• The investment is viewed by Polymarket's CEO as a significant move towards integrating prediction markets into mainstream finance.
• While advocates see tokenization as a means to improve accessibility and transparency in trading, critics express concerns over potential risks to established securities laws and investor protections.

New York Stock Exchange owner Intercontinental Exchange is investing up to $2 billion in Polymarket and will partner with the company on future tokenization initiatives.

Polymarket lets users buy and sell shares of potential event outcomes, with every trade matched peer-to-peer through smart contracts. The company, which was founded in 2020, has been sought out by people interested in expressing their opinions on current events, politics, business moves, culture and sports.

Shayne Coplan, founder and CEO of Polymarket, said in a statement on Tuesday that the deal is a ”major step in bringing prediction markets into the financial mainstream.”

Tokenization is the process of turning real-world assets into digital tokens. It uses blockchain technology that powers cryptocurrencies to create digital tokens as stand-ins for things like bonds, real estate or even fractional ownership of a piece of art and that can be traded like crypto by virtually anyone, anywhere at any time.

Advocates say tokenization is the next leap forward in crypto and can help break down walls that have advantaged the wealthy and make trading cheaper, more transparent and more accessible for everyday investors.

But critics say tokenization threatens to undermine a century’s worth of securities law and investor protections that have made the U.S. financial system the envy of the world.

Interest in tokenization has gotten a boost thanks to the election of President Donald Trump, who has made enacting more crypto-friendly regulations a top priority of his administration and signed a new law regulating stablecoins.

Shares of Intercontinental Exchange rose about 1 % in morning trading.