Digital securities are here. We know what they can do, and the opportunities that they can open up. All that is needed now is a good sales pitch, and adoption will come; A pitch that doesn’t just promise, but actually delivers on things like,
- Cost savings
- Intuitive platforms
In an effort to expedite this adoption, Vertalo has just announced the launch of their free ‘Tokenization Sandbox’. With it, they hope to check off all of those points, and more. Vertalo has the following to say,
‘Through this new initiative, participants in the Digital Asset industry can, at no initial cost, implement and learn by tokenizing digital assets in transactions that would otherwise incur expensive software development and consulting fees that routinely cost in excess of $50,000 dollars per single asset tokenization.’
So what exactly is a Sandbox, and why are they important?
We all need a safe space, and that is exactly what a Sandbox is – a testing environment which acts as a safe space to experiment and try new things. In this particular instance, the Sandbox has a theme – Tokenization.
We need sandboxes, because they facilitate change. This could be change to regulations by proving to those that make them, that there are new ways of achieving old goals safely. Or maybe it is a scenario, such as the one described here today, where a new sector is trying to garner new users and adoption through validation of the potential in their offerings.
Vertalo has stated that the goal of this launch, is to drive adoption of digital securities. Why now though?
Well, the world’s economy is changing. Traditional means of investing, and the services which make it possible, need to change with it.
With the current state of flux surrounding investment operations worldwide, the present is as good a time as any to begin really pushing for the adoption of new standards; Standards which Vertalo is working hard to develop, and fuel adoption of.
Is Anyone Listening?
Now that we have established what a sandbox is, and why one is needed now, is there anyone actually interested in taking part?
Before having even launched, 27 companies, and counting, have already applied to take part – essentially conveying a resounding ‘YES’.
Some of the noteworthy names among those to be participating include,
What’s in the Box?
Those joining the fun in the Tokenization Sandbox, can expect a variety of features and capabilities on offer. They list the following solutions as being included:
- Cap table and investor list file upload.
- Tokenization of the cap table or client list in minutes.
- Deployment of the newly-issued token across a cap table or client list in minutes.
- Creation of Keyless Wallets in minutes that are accessed over the web using email address and password.
- Investor access to their Keyless Wallet accessed through an email/password driven website.
- Option for investors to utilize self-sovereign wallets in lieu of their Keyless Wallets.
- Implementation of a Controller Function to enable Issuers to address fraudulent or mistaken transactions, abandonment, escheatment, and transfer upon death requirements.
- Ability to swap chains in minutes without impacting the underlying security or its Investors.
- Connection to previously integrated Service providers
While Vertalo continues to support multiple blockchains, they have made it clear that they feel Tezos is the answer, moving forward, for a variety of reasons, which we took a look at HERE.
Who is Eligible?
With adoption being the goal, it is convenient that the Tokenization Sandbox is open to a wide variety of candidates. Those eligible for participation include:
- Token issuers
- Alternative trading systems (ATS)
With 27 right out of the gate, it shouldn’t be a surprise to see companies fitting within each bullet point taking part.
Along with launching the Tokenization Sandbox, Dave Hendricks, CEO of Vertalo, took the time to share his thoughts on what the program has to offer. He stated,
“The Vertalo Sandbox Program is an innovation that is designed to reduce obstacles to digital asset transformation and to empower market participants…In order to create confidence in the digital transformation programs, we need to move past expensive services for commodity transactions such as token issuance.”
“The Vertalo way to do this is to empower companies to model and learn from their tokenization activities, in a freemium and no-risk manner, in the Vertalo Tokenization Sandbox. As companies finalize their capital structure, fundraise strategy and issuance process, Vertalo can assist these companies by moving them into production, or they can seek the services of another provider if Vertalo is not a fit. Exposing investment banks, issuers, and broker-dealers to Vertalo’s user-friendly platform will push us far ahead of where we are today.”
If you recognize the name ‘Vertalo’, it might be from our recent look at their work with RECM. In this look, we discuss the tokenization of up to $300M in real estate, with Vertalo underpinning the entire process.
Based out of Austin, Texas, Vertalo was founded in 2017. While specializing in cap-table management, Vertalo have expanded their capabilities, providing a diverse set of services surrounding digital securities.
CEO, Dave Hendricks, currently oversees company operations.
Tokenise International Ltd Launches Tokenise Stock Exchange
Tokenise International Ltd
While some companies are content servicing a narrow range of the digital securities sector, there are a few players which have their eyes on something greater. Tokenise is one of these companies, with a stated goal of offering a comprehensive suite of services on a global scale.
Based out of Gibraltar, and licenced within Barbados, Tokenise International already maintains a global presence. The group is comprised of multiple branches,
- Licenced broker services
- Equity Crowdfunding
- Global security token exchange
What’s the Problem?
Arguably the biggest missing link in the world of digital securities, is a developed group of exchanges. To date, the sector is rife with competitors operating as issuance platforms and custodians, yet there remains a notable dearth of options for the actual buying/selling of digital securities.
Furthermore, multiple exchanges are restricted to offering their services within their own nation’s borders. Very few, if any, truly global solutions exist.
How Will They Solve It? – Tokenise Stock Exchange
By obtaining licensure as a broker, Tokenise.io is ready to be put to work. With this being the case, the Tokenise Stock Exchange has become the immediate focus of holding company, Tokenise International.
The Tokenise Stock Exchange, formerly known as DAXNET, has just seen its website go live. Here, investors can begin onboarding, gaining access to a variety of opportunities.
Tokenise Stock Exchange lists the following as a couple of the services they offer at this time.
- Issuance capabilities, facilitating the hosting both IPOs and STOs
- Secondary market support, providing a ‘home’ for established tokens, creating liquidity and accessibility as a result
Beyond supporting the issuance, and trading, of security tokens, Tokenise has imbued a great deal of flexibility into the types of security tokens supported. These tokens may be structured as/represent anything from equity, debt, dividends, fractional ownership, Funds, and more.
Martin Graham, Group Chairman, touched on why security tokens hold such promise, stating,
“Tokenisation of securities and other real-world assets will transform the accessibility and efficiency of capital markets. Removing inefficiencies, friction and barriers to participation will democratise the process of matching providers and consumers of risk capital. This, in turn, will increase the flow of funds and investment opportunities for market participants.”
While the company’s focus may be on Tokenise Stock Exchange, development still continues with Tokenise UK. With the state of the economy in 2020, many have noted that funding through traditional VC channels has greatly diminished. As a result, we have seen an increased interest in equity crowdfunding.
While time will tell if equity crowdfunding can sustain and convert this interest into actual participation, Tokenise intends on being ready. One example of events which can be expected on the platform is the current offering by KABN – an equity token offering looking to raise $8 million USD.
Behind the various products on offer, by Tokenise International, is an adept team. The core of this group is comprised of the following five individuals, with each boasting impressive resumes.
Michael Kessler – CEO & Founder
Martin Graham – Group Chairman
Simone Murray – Chief Financial Officer
Simon Kiero-Watson – Director of Markets
Hirander Misra – Group Director
With the onboarding of clients commencing, we reached out to Tokenise Stock Exchange to ask them, ‘What is next? What is the next marker on the Tokenise roadmap which companies and investors alike can look forward to?’
Michael Kessler, CEO & Founder of Tokenise Stock Exchange, took the time to elaborate on what they offer, and what we can look forward to. He stated,
“Tokenisation of securities and other real world-assets will transform the accessibility and efficiency of capital markets. By bringing new asset classes across multiple jurisdictions to a global community of investors will enable companies to raise capital more easily and enables greater liquidity to be generated where it was previously illiquid.
In terms of the next steps
- Enabling of full KYC & AML as well as categorisation of investors
- We are talking to a number of issuers who want to list on the platform and go through one of our corporate advisers
- We expect to have the first listings coming through over the coming weeks/months (partly dependant on Covid) that will allow people to list multiple asset classes to suit their requirements, these include:
- New asset classes
- Fractional ownership of physical assets
- Private equity Royalties
As well as traditional assets:
We are talking to over 20 new companies from securitising influencers and household names, medicinal CBD facilities, property assets, beverage producers, beauty products, fintech businesses etc. Ideally over the coming weeks we will have 3-4 new issuances ready to go through the listing process and join our exchange. We would love new issuers to contact us and for investors to register.”
While the market is nowhere near saturated, with regards to security token exchanges, there are a few currently active or in development. Each of the following holds the potential to be a competitor with what Tokenise has to offer.
Each of these exchanges vary slightly, in that MERJ serves a global client base, while OFN is restricted to the U.S., and Archax has yet to launch.
SEBA to Integrate Tokensoft Service Suite
Swiss bank, SEBA, has just announced the integration of service provider, Tokensoft. New to Europe, Tokensoft will see their capabilities leveraged by, what is considered, one of the more promising banks involved with blockchain.
With SEBA maintaining a presence in over 10 countries, this integration of services stands to have a widespread positive effect. Between their licensure, obtained through FINMA, a well-funded runway, tech integration, and a friendly government, SEBA seems well-poised to set themselves up as a leader in the digital securities sector.
That Didn’t Take Long
When we first addressed the expansion of Tokensoft in to Europe, we did not expect to be reporting on new partnerships less than one week later; yet here we are, and SEBA has announced the integration of Tokensoft services into their own offerings.
SEBA notes three main areas which they expect will benefit from this integration.
- Expansion of capabilities surrounding the creation of customized digital securities
- Mutual benefiting from financial market and technology expertise to broaden customer base
- Push the sector forward through ensuring interoperability with past and present FinTech
It’s All Part of the Plan
Much like Tokensoft, this move is all part of a plan by SEBA to develop, both, the digital securities sector and a foothold within it.
Something that will allow for SEBA to continue developing their services, and establishing partnerships such as the one discussed here today, is their past success during capital raises. In recent months, SEBA has indicated that they looked to build upon a, roughly, $100M Series A, with a $100M Series B.
Upon announcing this new alliance, representatives from each, SEBA and Tokensoft, took the time to comment.
Matthew Alexander, Head Asset Tokenization at SEBA, stated,
“We are convinced that this strategic partnership will enable us to provide our clients with enhanced tokenization technology and solutions to suit existing and emerging demands. As one of the leading security token issuance and asset servicing platforms, Tokensoft’s core competencies perfectly complement our existing asset tokenization capabilities. Our Asset Tokenization division offers enterprise grade solutions, with our Swiss banking license assuring the highest standards in security and stability.”
Mason Borda, CEO of Tokensoft, stated,
“Switzerland has been at the forefront of digital asset development – SEBA is globally one of the first banks with a focus on digital assets, which received a banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA). We believe that such partnerships are the kind of careful, detailed groundwork that will lay the foundations for a robust Digital Asset Economy in the years to come.”
Founded in 2018, SEBA maintains headquarters in Zug, Switzerland. Above all, SEBA has shown belief in a future built upon digital securities. In addition to working towards making this belief a reality, the bank continues to provide various traditional financial services to their customers.
CEO, Guido Buehler, currently oversees company operations.
Founded in 2018, Tokensoft maintains headquarters in San Francisco, United States. The team at Tokensoft has developed a variety of solutions built to facilitate growth in the digital securities sector.
CEO, Mason Borda, currently oversees company operations.
Saudi Arabian Digital Securities Issuance Platform to be Developed by Securrency + Musharaka Capital
Working Together for Saudi Arabia
The goal of this partnerships is to develop a digital securities issuance platform, targeting, specifically, towards Saudi Arabia.
Upon announcing their partnership, representatives from each, Securrency and Mushraka, took the time to comment.
John Hensel, Chief Operating Officer of Securrency, stated,
“We are pleased and honored to be working with Musharaka Capital on this groundbreaking initiative. Saudi Arabia is the largest market in the region and, by combining Musharaka’s deep financial markets expertise and our cutting-edge technology, this venture will create new opportunities for capital formation and enhanced liquidity. Together with Musharaka’s strong leadership team, Securrency aims to stimulate the growth of businesses in Saudi Arabia and streamline foreign investment into the Kingdom.”
Ibrahim Al-Assaf, CEO of Musharaka Capital stated,
“This is surely a Fintech leap. Such projects were not feasible a few years ago due to the lack of consumer demand. However, as the economy shifts to digital trading and consumer trends develop, we are introducing developments that didn’t exist in the Saudi market. Our ability to be dynamic and adapt to consumer needs while having an agile and well-equipped team is essential to grow and succeed in our current business environment.”
Over the past year, there has been an increasing global presence surrounding digital securities. While the sector may have started out hot within North America, the concept behind tokenization quickly caught on, and spread to regions like Europe and Asia. Fast forward to today, and Europe has, arguably, made the most headway; As made evident through multiple countries developing clear regulations – resulting in companies shifting operations into these regions.
With that being said, it is both, positive and unsurprising, to see the sector making headway within the Middle East. While, technically, situated within multiple continents, the Middle East is most often viewed as its own region.
This expansion into new regions simply underscores the potential which digital securities hold, as countries around the world are working to establish partnerships and capabilities, to essentially ‘futureproof’ the way they operate.
Founded in 2013, Musharaka Capital maintains operations in Saudi Arabia. Above all, Musharaka Capital acts as an investment firm, with a focus on real-estate. Company services extend to include advisory services, portfolio management, custody, and more.
CEO, Ibrahim Al-Assaf, currently oversees company operations.
Founded in 2015, Securrency is headquartered in Washington, D.C. The team behind the company has developed a variety of offerings meant to service the digital securities sector. These services include the ‘Compliance Aware Token’, Securrency RegManager, Securrency InfinXchange, and more.
CEO, Dan Doney, currently oversees company operations.
In Other News
In our on-going interview series, we recently had the pleasure of speaking with Securrency CEO, Dan Doney. Through this conversation, we learn about Doney and his experiences with the FBI, NSA, DHS, and DIA, along with what makes Securrency special.