Craig Mc Gregor is the CEO of DSTOQ and has been involved in the cryptocurrency space since 2013. Some of his previous experience includes working at Bloomberg where he focused on analysis of the banking, insurance, and real estate sectors. His work experience also includes investment analysis and management of a portfolio of +30 companies worth ~$600m.
We are pleased that Craig took time off from his busy schedule to discuss DSTOQ.
A.T: For the benefit of our readers, can you please explain DSTOQ in a nutshell?
CMG: DSTOQ is a licensed stock exchange for the trading of security tokens. We have an end-to-end solution for the security token market through the two main pillars of our business: firstly our regulated decentralized trading platform, and secondly we also tokenize securities to be traded on our platform. The combination of the two allows us to service both sides of the industry: issuers and investors.
A.T: This end-to-end approach sounds quite different to a lot of your competitors, what is your reasoning behind it?
CMG: After in-depth analysis and market research, we found that the combination of tokenization and a trading platform was the best approach to maximize value and deliver to customers what they required the most. Many projects in the security token space look only at tokenization, which in and of itself is not particularly valuable if there are no trading platforms for security tokens. Likewise creating a pure trading platform for security tokens without understanding tokenization is not likely to succeed in our opinion.
We are lucky enough to have been able to build a strong team with core competencies in both fields and therefore chose to create both a tokenization and trading platform, which we believe is in dire need within both the blockchain industry and traditional financial markets.
A.T: It seems you’ve done your research. With your understanding of what the customer’s needs, which assets do you think the market has the most demand for?
CMG: Our data indicates that there is a large demand for tokenizing traditional securities such as government-backed bonds, stocks, gold, oil, and more, and as such we make them available to investors worldwide on our platform. We can also help companies raise money via STOs through both the creation of their security tokens and a platform for them to be traded.
A.T: Can you explain how the peer-to-peer trading of tokenized securities using the DSQ token will work?
CMG: The DSTOQ platform allows users to purchase high-growth assets such as stocks, ETFs, government bonds, gold and more using crypto. Traders can use the DSQ token to buy the assets in the form of tokenized securities – this happens as the real-world assets go through a tokenization process. Users can then invest and trade these assets via blockchain technology without ever leaving the token economy.
A.T: Can you explain the reasoning behind your focus on emerging markets?
CMG: Being South African myself, I experienced firsthand how difficult it is to invest in foreign assets. I was forced to pay almost 10% in fees to invest abroad, which I found utterly ridiculous. In many emerging markets, South African included, investors are charged monthly fees of around $30, in addition to security broker fees between 0.2% and 0.9% per trade. This is on top of a minimum charge of around $25 and foreign exchange fees of 2.5–5% for foreign investments. This means South Africans easily pay 5–10% in fees to invest abroad, especially when investing small amounts. Such problems prevent individuals from accumulating even modest wealth.
In addition, companies, especially in developing economies, lack channels of access to capital markets – this gives them virtually no options for raising funds to grow or innovate.
When you add those things together it becomes clear that a blockchain platform like DSTOQ has a massive value add and huge potential customer base in emerging markets, which is why we focus on them – because we can add significant value to emerging markets.
A.T: What does your stock exchange license from Vanuatu allow you to do?
CMG: Our stock exchange license allows and enables us to do three main things: accept cryptocurrencies for our exchange, tokenize securities, and conduct IPOs directly on-chain. The latter is effectively an STO.
A.T: What made you choose to launch on the Stellar blockchain?
CMG: Stellar is a good starting point for our business given that their current capabilities fit our requirements and are already in production, unlike many other blockchains that have yet to be implemented.
Through our technology choice we are able to offer fast transaction speeds, a high level of security, and the infrastructure for our decentralized exchange where we never control our customers’ funds.
A.T: Can you share some details in regards to your partnership with aeternity, and what this entails?
CMG: Our partnership with aeternity will allow for the integration of aeternity’s decentralized data oracles, which track and record information on real-world data such as financial data, global prices, exchange rates, and news into the DSTOQ platform. We also plan on using them to confirm real world data points such as completion of a building construction, or delivery of goods. Oracles could even be useful for things like numbers of users or sentiment on market penetration of a product or technology.
A.T: You have an ambitious goal of tokenizing bonds, commodities, ETFs, and equity in real companies. What will you target first?
CMG: Yes – it was ambitious of us, but we’re on track to launch and are very much focused on delivery. We’ve been working closely with regulators and have multiple people on our team with ample experience, including DSTOQ Head of Capital Markets Christopher Schuetz, the former Managing Director and head of the Primary Market Group at the Stuttgart Stock Exchange.
The first security tokens on our exchange will be ETFs, as they are a diverse asset class that can represent funds, bonds, shares, or commodities. If you’d like to vote on which assets we should list, please take part in our upcoming poll.
A.T: How will you on-board your first clients?
CMG: We already released our MVP to introduce the basic version of the DSTOQ platform, which runs on the Stellar blockchain testnet.
In addition, we’re constantly in touch with our community via Telegram, Twitter, LinkedIn, Medium and more, constantly releasing informative explanatory content to give our future users a better understanding of how our product and ecosystem will function. We are also soon launching our Community Program, a rewards-based initiative seeking to mobilize our existing and future community members. We want to give clients the chance to contribute to the growth of our platform and receive reward tokens for doing so.
A.T: How does DSTOQ differentiate itself from competition in the space?
CMG: DSTOQ has a stock exchange license, permitting us by law to issue real world assets in a tokenized form through blockchain. This is a huge edge for us, as we’re determined to launch to the market and provide security token services ahead of our competitors – many of which don’t have a license and don’t comprehend what it takes to develop a global platform for security token trading. In fact, most tokenizers do not offer equities, bonds, or index funds the way DSTOQ does.
A.T: Thank you again for the interview. Any readers who wish to learn more may visit DSTOQ.