On February 19, 2019, Securitize and OTCXN announced a strategic partnership. The goal of the partnership is to create a global security token issuance and trading platform. While the number of firms entering in the security issuance field continues to grow, there are few platforms capable of handling the task globally.
Securitize and OTCXN desire to change this situation through a combination of factors. The team’s new platform will operate completely within the local security regulations of each region. This allows companies from anywhere in the world to tokenize assets as they desire. Tokenization enables these firms to add liquidity to previously non-liquidable assets. In turn, tokenization creates a slew of new marketplaces to cater to the newly liquidable assets.
In order to make this awe-inspiring network function, both firms needed to provide their expertise to the equation. Securitize handles the tokenization process and issuance. The company is well-versed in these tasks. In fact, Securitize is so good at what they do; they recently secured millions in funding from North America's largest crypto exchange – Coinbase.
Additionally, Ripple, the original bank-focused cryptocurrency, also pledged funding to the platform. Receiving funding from these firms speaks loudly because both firms work heavily with the SEC. To date, the security token launch platform has worked with 22x, Augmate, and Spice VC.
For their part, OTCXN will integrate their custodial ledger system into the platform. These tasks include providing the necessary infrastructure for the project. Additionally, OTCXN tasks include facilitating secondary market trading. This last task is critical as many analysts point to the lack of secondary markets as one of the main drawbacks encountered by current security token users.
How The Platform Works
Speaking on the project, OTCXN's CEO, Rosario Ingargiola, explained that the platform functions in a “seamless” manner. Users are able to trade digital assets with anyone globally, regardless of what blockchain their tokens originated from. He discussed how the platform can accommodate trades across all custodial services and exchange clients.
Ingargiola took some time to describe some of the benefits the new platform introduces into the market. He noted that all assets being traded on the new network are “settled in real-time, on-chain, with finality, and cryptographic provability.”
What's the Next Move?
At this time the project awaits approval from local regulators in some regions. Gaining local regulatory approval is a crucial element when discussing offering security token services globally. Every region follows a unique set of securities regulations. This diversity is what has limited the expansion of other tokenization platforms globally in the past.
A Truly Global Experience
If Securitize and OTCXN succeed in their grandiose strategy, it signals a shift to a more global approach to the market. To date, cryptocurrency regulations have been limited to local legislators. Now that the technology exists to handle the global market, it is sure to usher in new discussions on creating global security token legislation in the future.