Nasdaq the second-largest stock exchange in the world, by total capitalization, is exploring a possible security token platform to support regulated initial coin offerings (ICOs), according to a report published Saturday. The stock exchange is interested in developing a platform for companies to offer security token offerings (STOs) to issue tokens and raise funding, the Block reported citing an unknown source.

The report said Nasdaq was speaking with a number of firms, including blockchain startup Symbiont, to launch the STO platform which would issue tokenized securities as well as allow their trade.

ICO refers to a token offering from a company or organization in order to raise capital for a project. At the moment, they are largely unregulated and therefore put investors at risk. An STO is a token offering that is similar to an ICO but unlike ICOs, STOs are regulated. STOs are registered with the Securities and Exchange Commission and have a lot of similarities to regular shares. Security tokens are intended to be tradable assets and are issued to investors for future profits.

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