Singapore-based markets investment and trading platform SDAX has signed a Memorandum of Understanding (MOU) with Ownera to distribute digital securities over its FinP2P network.
SDAX is a MAS-regulated platform that performs asset tokenization of real estate, corporate finance, and ESG opportunities for institutional, accredited, and retail investors. Now, it has partnered with digital assets software company Ownera to solidify its commitment to bridge the interoperability gap between institutions and private market exchanges.
“We are excited to be working with leading industry innovators like Ownera that provide a best-in-class connectivity solution that will build the foundation of an interoperability infrastructure for the industry,” says Raymond Poh, CEO of SDAX.
While the digital securities industry is growing fast, it lacks a common global distribution network to connect issuers, exchanges, investors, and other market participants. Due to this, the rate of institutional adoption and investor access to high-quality digital securities has yet to reach its potential, especially in private markets where such securities tend to be illiquid.
As such, SDAX works with institutions to raise funds in a fast, secure, and cost-effective manner via blockchain technology that will make these private market investment opportunities accessible to investors via fractionalized ownership.
In addition, SDAX's exchange provides secondary market liquidity and enables its investors to participate in trading digital securities. Its partnership with Ownera provides an additional channel for investors to trade these private market digital securities over an interoperable global ecosystem of exchanges and institutions. As a result, it opens up possibilities for both investors and issuers.
“Even if a venue had hundreds of high-quality assets and thousands of active investors it would still only represent an insignificant fraction of the global private markets. A unified API such as FinP2P can solve this problem by enabling digital venues to distribute their assets to investors of other institutions, wherever they are in the world and whatever blockchain technology they are running,” said Anthony Woolley, the Head of Business Development and Marketing at Ownera.
New and exciting Investment Opportunities
The digital assets software company Ownera is building institutional rails for the multi-trillion-dollar digital securities market. The project basically aims to create a digital private market by interconnecting the global financial industry.
For this, they have created a global inter-trading network based on the open-source, interoperable FinP2P protocol to enable the distribution and liquidity of digital securities.
The FinP2P open-source routing protocol fosters the instant exchange of digital assets held on any blockchain platform. Any institution running a FinP2P node can basically establish a connection to any other institution running a node, which then can be used to distribute assets to the investors of the other party. Nodes are by any institution, bank, asset manager, exchange, or wealth manager, holding the appropriate regulatory licenses.
According to Ownera, the FinP2P network can open up digital distribution for the private markets, and SDAX can help them expand its ecosystem.
“The adoption of FinP2P will result in higher liquidity and better access to capital and assets by providing regulated firms such as SDAX with one secure point of connection to multiple pools of digital securities and investors across the globe,” said Woolley.
Woolley is a banking executive with expertise in Capital Markets at Citi, Societe Generale, and HSBC, who first ventured into blockchain technology in 2014 after realizing its potential to automate the entire lifecycle of a transaction through clearing and settlement in real-time. At the same time, this nascent technology supports the peer-to-peer transfer of value without any third parties or intermediaries.
In a recent interview, while talking about Ownera's vision for the digital transformation of financial markets, Woolley shared that “ultimately, every account will be replaced with a digital wallet.” This will, “…open up the potential for new and exciting financial products and investment opportunities,” he said.
Wooley also talked about real estate being a core focus at Ownera, which, while it has the largest market, is currently offline. There is also massive investor demand for it in the current uncertain times' thanks to real estate being an inflation hedge and largely uncorrelated to the public capital markets.
“What is needed to really make this take-off is institutional engagement and global distribution such that investors can access those real-estate investment opportunities wherever they might be,” explained Woolley.
Currently, the real estate market faces the problem of localized and stagnant assets, low liquidity, and siloed data and IT systems handled by service providers, which can be addressed by creating their digital representations on the blockchain, i.e., tokenization.
According to Tokeny's case study, tokenizing the $10+ trillion real estate market offers several benefits, such as a global network, a broad range of investors via fractional ownership, accessibility to relevant data in real-time, and substantially reduced compliance and administrative costs.
Tokeny-Ownera Collaboration to Unlock Global Liquidity for Tokenized Assets
Besides SDAX, Ownera has also partnered with Luxembourg-based tokenization platform Tokeny to distribute tokenized assets over the Ownera FinP2P network.
Tokeny is leading the market in tokenization solutions by enabling direct transfers and settlements of tokenized assets in a compliant manner. Digital securities are very complex as they involve a lot of data and do not operate as bearer instruments. Every digital securities transaction is also subject to regulatory oversight, and there are significant ongoing fiduciary responsibilities on the part of both the asset owner and their nominated registrar.
This is where Tokeny's default compliance comes in handy. As for making transfers, it uses the market standard ERC-3643 to ensure each transfer can only be made between eligible investors through its digital identity system ONCHAINID.
By integrating with Ownera's FinP2P distribution network, Tokeny is further improving the liquidity of its tokenized assets for its clients by connecting to additional distribution networks and reaching a broader investor base across the globe. This integration also allows Tokeny clients to use tokenized assets for collateralization.
“When assets are brought on-chain, they can be transferred and managed by their owners, at a lower cost, and in real-time. As the compliance is built in at the token level, visibility and interoperability is the key to maximizing asset liquidity,” said Daniel Coheur, Chief Strategy Officer of Tokeny.
Thanks to this integration, any institution deploying a Tokeny solution also has the potential to access the added distribution capabilities of the Ownera FinP2P network.
“Institutions have been faced with the challenge of deploying multiple blockchain technologies if they want to access different isolated pools of assets and investors,” a problem solved by Ownera, which provides higher liquidity and better access to capital and assets, said Woolley.