The Philippines-based security token exchange CEZEX announced plans this week to extend their services into Hong Kong. The decision would make CEZEX the first security exchange to offer regulated security token trading in the country. Hong Kong has seen significant growth in their crypto sector ever since mainland China closed all their local exchanges and banned initial coin offerings late last year.
The company behind CEZEX, Inbase Partners, is based out of Taiwan. The company first received licensing from the Cagayan Economic Zone Authority (CEZA) earlier in the year. CEZA is responsible for dictating financial regulations in the Philippines special economic zone located in Luzon.
The deal was made possible through a strategic partnership with numerous local Hong-Kong broker-dealers. These partnerships will allow CEZEX to remain fully compliant with their exchange platform. Company executives stated that the project would digitize the existing financial system. The main difference being that instead of securities, the platform will handle blockchain-based security tokens.
Tokenization on the Rise
CEZEX company officials seek to tokenize large portions of the traditional economy. In a recent interview, company executives explained that they have plans to begin tokenizing stocks, bonds, and even real estate over the coming months. To accomplish such a monumental task, CEZEX has sought out the assistance of multiple brokerage firms.
CEZEX Company executives desire to create a new platform which offers more liquidity than current traditional-style security exchanges. This strategy will build a network of multi-asset class brokers. Traditionally, brokers only handle single asset classes. Currently, security token holders have little options in regards to trading their holdings. The last few months have seen multiple platforms enter the cryptospace to fill this void.
Hong Kong Wants In
The Hong Kong Securities and Futures Commission (SFC) documented increased adoption in the cryptocurrency markets. These rising interests have pushed the committee towards more crypto-friendly options. This latest development signals an embracing of security tokens by the SFC.
Security Tokens Receive the OK
Security tokens are designed to meet the stringent requirements adhered to by traditional financial institutions. These requirements can include following strict know your customer (KYC) and anti-money laundering AML laws. Both of these laws require individuals to reveal their true identity before participating in the market.
Inbase Partners is a digital asset advisory firm. Their primary focus is on secondary trading and fundraising for digital asset-related projects. The company entered the market in 2014 and had seen considerable success since its debut. Inbase Partners is best known for their contributions in the Fintech and venture building sectors of the Philippines.
The Future is Secure
Security tokens continue to gain popularity among traditional investors for numerous reasons. These tokens provide investors with a more secure alternative when compared to conventional crypto investments. CEZEX is wise to position their platform before large-scale security token adoption. The move could place the firm in the perfect spot to handle this growing market trend.