A Global Perspective
With the year, and decade coming to a close, we at securities.io thought it prudent to gauge global industry sentiment as it stands. What is the current state of the digital securities sector? Is it better today than it was yesterday? Maybe those ‘in-the-know’ feel as though strategic work still needs to be done.
These are all queries that many may have, including us as securities.io. With this in mind, we have reached out to various representatives within the sector. Each hailing from differing regions of the globe.
The following commentary sheds insight into their thought processes, and how regulatory environments may shape market perception.
Africa, Asia, Europe, North America, and the United Kingdom. These are the regions which we have decided to look at on an individual basis.
The following companies and their leads have taken the time to share their thoughts.
Penny for your Thoughts?
Our methodology was simple – ask the same 5 simple questions pertaining to digital securities to 5 CEO/Managing Directors from around the world.
The goal? Gain insight into the variances in perception and adoption of the sector based on geography. Something we feel is an important metric, given the potential of the sector to influence FinTech on a global scale.
Africa – Ed Tuohy, CEO of MERJ
Situated in the Indian Ocean, east of Tanzania, The Seychelles is an island nation which acts as home to MERJ. Led by CEO, Ed Tuohy, MERJ is a securities exchange which has been in operation since 2011.
Their efforts have resulted in becoming the first company to successfully issue tokenized shares on a digital exchange. In addition, the company has established multiple strategic partnerships which should allow for great expansion into not on the U.S., but Europe as well.
In your opinion, what represents the largest industry achievement/hurdle cleared, to date?
It sounds simple but the understanding that digital securities or tokenised securities are not the same as crypto currencies. The ICO phase caused a lot of reputational damage to the technology and it has taken a while to separate digital securities from that stigma.
With the aforementioned achievements laying a foundation for the industry, what remains as the biggest obstacle moving forward?
User experience. The majority of the world is not ready for self-custody with private keys etc. Until UX is sorted the full benefits of tokenisation are still some way off. Also the spectrum of underlying chains is slightly undermining the growth. It's like having 30 different internets to choose from. Standardisation would definitely help with interoperability.
With regards to ‘friendly' regulation and government acceptance, have you noticed any countries leaving the rest behind?
Actually a lot of countries are being very proactive and I include the Seychelles in that but this is a team sport and we need to be working globally. In that respect you are only as strong as your weakest link. The US and China are such big centres of gravity, and although both are being proactive in some regards they are still quite challenging environments for this technology.
Much has been made about the transformative capabilities of digital securities. With the potential to affect change in many industries, which do you feel stands to benefit the most from the digital securities sector?
It's the consumers of capital markets – ie. Issuers and investors. It's the ordinary people on the street who may never have had a fixed line computer or a stock brokerage account but they do now have a smart phone. We are designing our technology to integrate seamlessly with smart phones. We are providing an access point to the capital markets that didn't exist before for millions of people. That's the biggest winner by far. Democratisation of the capital markets.
Looking forward, where along the growth trajectory do you see digital securities in the next two, and five years?
In the next two years we expect to see a lot of asset-backed type securities – hard assets like gold, collectible assets like cars and art, and real estate. In 5 years I believe there will be more intangible assets – copyrights, music rights, authorship rights, as well as a deep and liquid pool of seed, venture and SME companies. These are perfect for investors in emerging regions who are looking for ways to diversify internationally.
Well there you have it! As 2019 is about to wrap up, there is a clear trend evident within the sector – a positive one. While many hurdles have been met and cleared, there remain many more on the horizon. Despite this, the potential that digital securities hold to reshape FinTech remains as tantalizing as ever.
We will touch base in a few months to re-gauge industry sentiment with a new set of influencers from around the world. Until then, stay informed by frequenting securities.io!