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First Ever Blockchain-Based IPO Launches on National Stock Exchange

MERJ Exchange, the national stock exchange of Seychelles had previously announced a partnership with a UK-based fintech firm, Globacap to issue tokenized securities available on the MERJ exchange platform. MERJ Exchange became the first national stock exchange to list tokenized securities. The exchange is now launching an IPO of the tokens.

Globacap, founded in 2017 and based in the UK, is a blockchain fundraising firm that will also be supporting the launch. The fundraising firm was accepted into the Financial Conduct Authority’s (FCA) regulatory Sandbox Cohort 4 in 2018 and became the first company to issue a security token backed by equity under the FCA’s surveillance. Having exited the sandbox in June 2019, Globacap became the UK’s first fully regulated digital security offering platform.

The shares are available on the MERJ exchange platform as well as through broker-dealer Jumpstart and crypto custodian Prime Trust, which are both based in the US and via Globacap.

Edmond Tuohy, CEO of MERJ Exchange mentioned:

“These novel financial instruments are here to reshape the financial industry for years to come. MERJ provides the regulatory framework necessary for investors globally to access these markets in a safe and compliant manner. Whether they’re issuing tokenized or traditional shares, companies are not going to want to go to a jurisdiction that doesn’t meet high international standards because it will attract greater scrutiny from global regulators.”

Reported by CoinDesk, MERJ mentioned that it is using the Ethereum blockchain to record share register ownership as “it is the best supported protocol for these purposes.”

MERJ’s listings page shows that the tokenized security is currently trading at $2.42, with a market capitalization of $21,015,781.

Licensed by the Indian Ocean nation’s Financial Services Authority as a securities exchange, clearing agency, and securities depository (CSD), MERJ is able to host issuers from North America, Europe, Asia, Australia, and Africa.

Tuohy further mentioned that MERJ being licensed as an exchange, and CSD will help deliver on the benefits of tokenization:

“We’ve spent three years working with our regulators to build a robust and compliant framework for issuers wanting to leverage the benefits of distributed ledger technology within a publicly listed environment.”

Crypto Exchange Huobi Plans to Reverse IPO in Hong Kong

Cryptocurrency exchange Huobi has reportedly been planning a reverse initial public offering (IPO) according to a document revealed by the Hong Kong Stock Exchange (HKEX).

In a notice published on September 10, the Hong Kong-listed electronics manufacturer Pantronics Holdings Limited, which was a company that was acquired by Huobi in 2018, uncovered that it would be renamed to Huobi Technology Holdings Limited.

Patronics Document. Source: HKEX

According to the disclosed documents, the company transferred more than 221 million ordinary shares in favor of the Huobi Group at the acquisition stage. Resulting in a $77 million deal, Huobi became Pantronic’s largest shareholder with more than a 73 percent stake. It has been assumed that the ultimate goal of the deal was to allow Huobi to conduct a reverse IPO in Hong Kong.

Stricter regulations on reverse IPOs from the HKEX planned ahead for October 1 may affect the company’s move. HKEX stated that it would change current regulations, meaning it would be harder for those that acquire a publicly listed company in different industries based in Hong Kong.

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World's Second Largest Bitcoin Mining Company Raises $90M in US IPO

The world’s second-largest bitcoin mining equipment producer, Canaan Inc., raised $90 million during its initial public offering (IPO).

According to Bloomberg, the Chinese company based in Hangzhou sold 10 million American depositary shares at the $9 apiece on Nov. 20. The filings with the US Securities and Exchange Commission (SEC) show that the shares have been marketed for $9 to $11.

The mining equipment firm had originally planned to raise around $400 million in October, however, there was a minor setback. The company lost its lead underwriter, Credit Suisse Group AG before the deal was launched as shown in the filings.

The IPO was led by Citigroup Inc., China Renaissance Holdings Ltd., and CMB International Capital Ltd. The shares will be available for trading starting Nov. 21 on the Nasdaq Global Market under the ticker CAN.

A week before the IPO, the mining company suffered a huge blow, resulting in a much lower amount raised than expected, which was around $200 million to $400 million.

Earlier this year, China had plans to ban bitcoin mining. However, with the recent pivot with Chinese President Xi Jinping endorsing blockchain, the National Development and Reform Commission deleted Bitcoin mining and cryptocurrency mining from the list of industries that China should ban. This resulted in a key development for Canaan as well as the fact that Bitcoin has been increasingly difficult to mine.

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Alibaba’s Ant Group Set to be 2020’s Top IPOs in Hong Kong and Shanghai

Ant Group, formerly known as Ant Financial has announced its intentions of launching an initial public offering (IPO) that would be featured both on the Shanghai Stock Exchange’s STAR board and the Stock Exchange of Hong Kong (HKEX/ SEHK).

The Inner Scoop on Ant Group’s IPO

The STAR board focuses predominantly on technology companies and hopes to rival Nasdaq. A senior executive of Ant Group disclosed anonymously that the fintech company had been holding off the announcement of the listing, due to its goal of “securing the full support of Beijing.”

Another Ant executive suggested that the IPO was still in its early processes of development, which may explain why Ant Financial has not yet provided a fixed date for its listing or publicly announced how much money it was hoping to raise. In any case, the technology company is so predominant in the fintech industry that even a listing of a tiny portion of its shares would equate to one of the biggest IPOs of any given company.

By dually listing the IPO on both HKEX and the Shanghai Stock Exchange, Ant hopes this will broaden the horizons of the fintech firm globally. Executive Chairman of Ant Group, Eric Jing, commented on the IPO listing:

“The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development.”

Though Ant Group wishes to extend its network throughout China, there is no mention of its IPO being listed on the US stock exchange, contrary to Alibaba, its affiliate company that was listed on the New York Stock Exchange and that is a major shareholder of Alipay.

While there is still much speculation revolving around the official launch date of the IPO, many fintech experts predict that the IPO will be one of the biggest ones of 2020. According to a Reuters report, Ant Group is expected to generate approximately $200 billion in market capitalization.

Ant Group — A Force to Be Reckoned With in the FinTech Industry

The fintech company aspires to branch out from the finance industry and focus solely on dominating the technology sector. Nevertheless, the Alibaba affiliate has a lot of bargaining power in China’s financial sector, as there are more than 600 million users that deposit funds into its Yu’E Bao, Ant Group’s money market fund.

Ant Group, founded by multibillionaire and business mogul Jack Ma, is also known as the parent company of Alipay, the top Chinese mobile payment company. Alipay rivals WeChat Pay and has approximately 1.2 billion users – this combines Chinese Alipay subscribers as well as overseas affiliates.

Ant Group Expands Blockchain Ecosystem

Among its many fintech projects, Ant Group’s ambitions of expanding go beyond just the traditional financial industry. Earlier this year, in April, it announced the launch of its proprietary blockchain platform in China – OpenChain. OpenChain is a relatively new blockchain network that equips software developers and small businesses with the proper tools to leverage the Chinese blockchain giant’s proprietary blockchain consortium – Ant Financial Blockchain. OpenChain also provides efficient and cost-effective solutions for the development of smart contracts and decentralized apps (DApps).

Trump Administration May Consider Placing China’s Ant Group on Trade Blacklist

The US State Department recently submitted a proposal to add Ant Group, China’s multibillion-dollar digital payments company, to a trade blacklist, inhibiting the fintech giant’s business operations within the US.

China and US caught in tech power struggles

The proposal is said to be currently pending review by the Trump administration, according to people familiar with the talks and per Reuters’ report. The Trump administration has opposed China’s emergent growth in the technology sector for quite some time, restricting Chinese companies such as Huawei from importing hardware into the US.

The United States and China have been caught in a cold tech war for quite some time, with President Donald Trump affirming that China has been spying on the country and breaching user privacy through their tech devices.

Should the proposal to ban Ant Group from the trade list go through, this will prevent and discourage American investors from partaking in Ant Group’s initial public offering (IPO), which is rumored to be the biggest one yet for 2020, estimated at a potential $35 billion. The IPO is going to be huge, as it has a dual listing in both Shanghai and Hong Kong.

As disclosed by Reuters, the Trump administration has been hard at work in battling China’s emerging tech dominance, with United States Senator Marco Rubio calling for Chinese companies to be investigated. The senator, along with other members of the Trump administration, appear to be seeking ways to delay the IPO that is to be launched by Alibaba’s unicorn fintech company Ant Group.

The US State Department proposal comes at a time when tensions between the US and China have been high, in light of the upcoming November 3 presidential elections. President Trump has long used his stance against China to drive his presidential campaign forward, reigning down hard on China when it came to establishing foreign policies.

Currently, Ant Group’s payment application, Alipay, is banned in the United States.

What this means for blockchain and crypto

If the US government approves the proposal, Ant Group operations in the US would be deterred. However, how much of its growth would be inhibited is still up for debate, as it has been experiencing significant growth in the fintech field.

Blocking Ant Group from trades in the US may potentially lead to a slower adoption rate of blockchain technology in the country, which may subsequently question US dominance in the tech industry, with China being reported to be very innovative in the blockchain and crypto sector.

This sentiment seems to be backed by some crypto experts, such as co-founder of coin exchange Ripple, Chris Larsen. Last week, the executive criticized the US for trailing behind in crypto and blockchain adoption, saying that China was on its way to establishing the world’s next financial system.

On its end, Ant Group, formerly known as Ant Financial, had recently established a blockchain-powered smart contract platform to assist small and medium enterprises (SMEs) in enabling cross-border trades to be conducted seamlessly.

World's Largest IPO Ant Group to Raise $34.4 Billion, What is behind it?

Alibaba founder and China’s richest man Jack Ma is set to become even richer as Ant Group prepares for the largest IPO in history projected to raise $34.4 billion.

Ant Group IPO is ready

On Monday, Ma’s Ant Group priced its dual listing on the Hong Kong Stock Exchange and Shanghai’s Star Market at 80 Hong Kong dollars ($10.32) and 68.8 yuan ($10.26) per share respectively

The IPO of Ant Group will raise around $34.4 billion which will increase the group’s total value to over $310 billion, marking it the largest IPO surpassing Saudi Aramco’s IPO of raising $29.4 billion. The Ant Group market cap will surpass Paypal as well which has a market cap of 200.43 billion on Oct 27 close.

What is Ant Group’s mission?

Ant group describes its mission being to “enable all consumers and small businesses to have equal access to financial and other services through technology”. The payment’s technology and services are the major business focus’ for Ant Group. In recent years, it expanded its financial services like lending and credit scoring. It will be a multi-functional financial institution combined services provided by banks, PayPal, and other institutions. Ant Group is an affiliate company of Alibaba Group and owner of Alipay, the largest online payment platform in China.

On Ant group’s official website, it lists 5 technologies: Blockchain, IoT, Database, AI, Security technologies. Among these technologies, blockchain has the greatest potential to reshape financial industries and even the monetary industry. These technologies combined will help the Ant Group become a financial empire.

New finance, blockchain, and trust

Bitcoin and the underlying technology blockchain have brought trustless money issuance, trustless finance, and even a trustless economy. Blockchain could be the best paradigm for new finance.

As for blockchain, Ant Group says with the technology, “We are establishing a next-generation trust mechanism while improving the efficiency of value transfer and multilateral collaboration.”

Trust is the core in the modern financial industry, and even in the monetary system and in the economy. Actually, fiat money is a result of trust and issued based national credit. Commercial banks do monetary services with only a portion of money reserved in the central banks, thus creating much credit currency supply in markets.

Ant group has launched some blockchain-based financial products built on its self-developed financial-grade consortium, AntChain. The Ant group aims to redefine the financial business process, removing redundant trust needs in business, and more.

The real challenges of Ant Group

Ant Group was once called Ant Financial. The new name is to highlight the technology innovation in finance instead of as a financial company. It also tries to avoid the sensitivity of strict financial regulations with the new name.

The essence of trust in finance is printing more money at a low cost. The finance trust is almost exclusively in hands of central banks and commercial banks and regulated by many rules. Trust is an extension of the power of government and financial oligarchy. the blockchain-based trustless mechanism of Ant Group, like other blockchain service providers, will remove the power residing in traditional financial systems. This will no doubt cause resistance from vested interests.

The real challenges for Ant Group are regulation uncertainty and distribution of benefits. The regulation stories of Facebook’s Libra has shown us how regulation can stifle the disruptive project as well.

During the event organized by China Finance 40 Forum (CF40) on Oct 23, Jack Ma criticized financial regulations by saying that the:

“Basel Accords is more like a club for the elderly. What it wants to solve is the problem of the aging financial system that has been in operation for decades, and the problem of system complexity. But China’s problem is just the opposite. China has no financial systemic risk but has a risk of lacking the financial ecosystem.”

Generally speaking, the core of Basel Accords is regulations on trust in banks. On financial problems, He further added:

“Today we are not unable to do it, but not to do it. Today, our technological development allows us to do this completely, but unfortunately, many people are unwilling to do it. Today’s global financial system must be reformed, otherwise, it is not just a matter of losing opportunities, but also causing the world to fall into more chaos, because it is normal for innovation to be ahead of regulation, but when innovation is far ahead of regulation When the richness and depth of innovation far exceed regulatory imagination, it becomes abnormal, and society and the world will fall into chaos.”

Ant group as a central bank?

The core functions of central banks are money supply and pricing money in terms of purchasing power through monetary policies.

At the Second Bund Financial Summit, the Alibaba founder also said “Digital Currency Could Redefine Money”. Although Ant Group’s blockchain has no native token/coin, unlike other major public blockchains, it doesn’t mean it will never develop them. If the money were to be issued by the Ant Group’s blockchains instead of the central bank’s, the group itself could be seen as another central bank.

Over $3 Trillion USD Subscribed, Largest IPO Ant Group Blowout is Ready

Blowout

On the evening of October 29, Ant Group and China’s Shanghai Stock Exchange issued an announcement on the subscription status of the online issuance of A shares and the success rate.

The announcement shows the subscription amount of Ant Group exceeded 19.05 trillion RMB (around $3 trillion US dollars), a new A-share record. The number of valid subscriptions for this online issuance is approximately 5.16 million, and the number of valid subscriptions is approximately 276.9 billion shares. Jack Ma’s Ant Group is expected to raise $34.5 billion USD, the largest IPO ever in history. The P/E ratio is near 154.

According to the HKEX announcement, the H-share subscription amount is around 1.3 trillion HKD. The sum of Ant Group subscriptions is around 3.02 trillion USD.

Ant Group IPO will make Alibaba founder and China’s richest man Jack Ma even richer. The IPO may also make the former chairman and CEO Peng Lei, who holds 9.89% of Ant group stocks, the richest woman in China. The value of stocks Lei holds will be worth around 207.7 billion RMB ($31.1 billion US dollar). At this issue price, the incentives for Ant’s employees will be as high as 137.7 billion, averaging over 8 million per employee for its 16,000 employees.

What is Ant Group?

Ant Group, also called Ant Financial, Ant traces its origins back to 2004 when Chinese e-commerce giant Alibaba Group Holding created Alipay to bridge a lack of trust between buyers and sellers in the early days of online shopping in mainland China. In 2011, Jack Ma separated Alipay from Alibaba with Zhejiang Alibaba E-Commerce Company as the operator, then changed the name to Ant Financial. To highlight the importance of technology innovation in financial and possibly to avoid regulations, it was again renamed to “Ant Group”.

Ant Group is the owner of Alipay, the largest payment platform in China. In addition, it has lending, credit scoring, and other financial related services. Unlike traditional financial institutions like banks, Ant Group has stressed and adopted technical innovations in financial inclusion. In a nutshell, it could be seen as a technology-driven multi-purpose bank. Five technologies in innovation are highlighted: blockchain, IoT, Database, AI, and Security technologies. Among these technologies, blockchain technology ranks first and is notable as blockchain has the potential to redefine financial infrastructure and even monetary systems.

Facts of Ant Group in a Nutshell

(1) In the twelve-month period which ended on June 30, 2020, the total payment volume (TPV) through Alipay in mainland China reached RMB118 trillion (around $17,653 trillion USD).

(2) The primary payment service revenue is from charging merchants transaction fees based on a percentage of volume.

(3) The Alipay mobile App has over one billion users and 80 million merchants.

(4) Based on Alipay’s payment as a connector and infrastructure, it has provided other fundamental services: CreditTech consumer credit and SMB credit needs, InvestmentTech for investment needs, and InsureTech for Insurance.

(5) It lists 5 items in strength: thriving Alipay platform and Ant ecosystem; innovation to serve customers; deep domain expertise, unparalleled customer insights, and leading technology; win-win partnership with financial institutions; Synergy with Alibaba.

(6) The Strategy of development and innovation are: drive user engagement and expand user base; build value with partners; invest in innovation and technology; expand cross-border payment and merchant services.

China's Central Bank and Watchdogs Meet with Jack Ma and Ant Group Execs following Regulation Criticism

Ant Group founder Jack Ma and the firm’s top executives met with People’s Bank of China (PBoC) and three financial regulators on Monday as China published new draft rules for online micro-lending.

The meeting with China’s central bank comes after Jack Ma—currently China’s second richest man and its wealthiest tech boss—spoke at the 2020 Bund Summit in Shang Hai last week, and questioned the suitability of international financial regulations for the Chinese economy.

According to Reuters on Nov. 2 the CSRC would not give details of the discussion but the meeting was attended by the People’s Bank of China (PBoC), China Securities Regulatory Commission (CSRC), China Banking and Insurance Regulatory Commission and foreign exchange regulators, who met with Ant Group’s controlling shareholder Jack Ma, Ant’s executive Eric Jin and its Chief Executive Simon Hu.

An Ant spokeswoman told Reuters that the company would “implement the meeting opinions in depth”.

Ant Group Co LTD is backed by Alibaba Group Holding LTD and is China’s leader in mobile payments, and provides a range of online financial services including insurance, asset management. Ant Group is preparing for their initial public offering which is set to be largest ever in history—expected to raise $34.5 billion.

Micro Lending RulesThe recent draft microlending rules published by the PBoC and regulators now sets a 5 billion yuan ($748 million) registered capital threshold for online micro-lenders in China. The draft comes as regulators fear rising defaults in the pandemic economy, and focus on banks and lenders that rely heavily on using micro-lenders or third-party platforms to underwrite consumer loans—a practice common for Ant.

While the draft does not specifically single out Ant Group—the head of consumer protection division at the bank regulator, Guo Wuping recently said that the rights of users of Ant-owned consumer loan companies Huabei and Jiebei deserve close scrutiny, according to Reuters.

Guo also said that a fintech like Ant Group could be seen as a technology-driven multi-purpose bank, and should therefore be under the same regulatory scrutiny as a bank.

China’s Second Richest Man?

Jack Ma was dethroned by Nongfu Spring founder Zhong Shanshan as China’s richest man only two months ago, but that could all change again after Ant Group’s anticipated record shattering IPO which is forecasted to raise $34.5 billion.

As reported by Blockchain.News, on Oct. 30, the subscription amount of Ant Group’s IPO now exceeds 19.05 trillion RMB (around $3 trillion US dollars), a new A-share record. The number of valid subscriptions for the online issuance is approximately 5.16 million, and the number of valid subscriptions is approximately 276.9 billion shares. Jack Ma’s Ant Group is expected to raise $34.5 billion USD, the largest IPO ever in history. The P/E ratio is near 154.

Ant Group’s IPO will once again make Alibaba founder Ma China’s richest man. In addition, it is expected that the IPO may also make the former chairman and CEO Peng Lei, who holds 9.89% of Ant Group stocks, the richest woman in China. The value of stocks Lei holds will be worth around 207.7 billion RMB ($31.1 billion US dollars). At this issue price, the incentives for Ant’s employees will be as high as 137.7 billion, averaging over 8 million per employee for its 16,000 employees.

Ant Group's IPO Delay Bigger Concern for Asia Tech than US Election

Could the suspension of Ant Group’s $34.5 billion IPO have a greater impact on Asia’s FinTech ecosystem than the United States election?

Ant Group was meant to hold its record-breaking initial public offering (IPO) today, that was until the IPO was abruptly suspended after a meeting between Ant executives and the People’s Bank of China along with Chinese financial regulators, following some regulatory criticism from founder and China’s second-richest man Jack Ma.

A day after the meeting between Ant Executives and China’s financial watchdogs, the Shanghai Stock Exchange announced the suspension stating that Ant Group’s actual controller, chairman, and the general manager were being interviewed by regulators.

In addition, the exchange said that Ant Group’s reported changes in the regulatory environment of financial technology may cause the Ant Group to fail to meet the issuance and listing conditions or information disclosure requirements. Therefore, the Shanghai Stock Exchange has decided to suspend Ant Group’s listing.

According to a report from CNBC on Nov. 04, the CIO of Reyl Singapore, Daryl Liew believes the suspension of Ant Group’s initial public offering (IPO) in China and Hong Kong could have a far greater impact on Asian financial technology (FinTech) than the United States election results.

Global Trend Of FinTech Scrutiny

Liew is the Chief Investment Officer for Reyl Singapore and thinks that Ant Group’s IPO suspension could represent a rising global trend of increasing regulatory scrutiny of FinTech companies. Liew told CNBC that as a result of this trend, investors may begin to reevaluate the valuations of tech firms.

Ant Group is the parent company of Alipay, the largest payment platform in China. The company offers lending, credit scoring, and other financial related services. Unlike traditional financial institutions like banks, Ant Group has stressed the importance and adoption of technological innovations like blockchain, IoT, Database, AI, and Security technologies.

Regulators have been showing increasing interest in Ant Group’s operations. The head of consumer protection division and Chinese banking regulator, Guo Wuping recently said that the rights of users of Ant-owned consumer loan companies Huabei and Jiebei deserve close scrutiny.

Guo also said that a fintech like Ant Group could be seen as a technology-driven multi-purpose bank, and should therefore be under the same regulatory scrutiny as a bank.

China’s Problem Too

Liew told CNBC, that prior to this suspension most regulatory concerns appeared to be the problem of the United States, with FinTech giants in China appearing to have more government support, like Tencent and Jack Ma’s Alibaba.

Ant’s record-breaking IPO would have led the way for future Asian fintech public listings, and would have been a huge achievement for China’s technology sector.

Liew asked:

“Is this something that has thrown a huge spanner in the works — not just for Ant but for other tech companies?” he added, “The fact that the Chinese are also now looking into this is a concern.”

Another expert, Winston Ma, adjunct professor of law at New York University told CNBC that he believes:

“The increased scrutiny of internet lending is just the beginning, as more regulations such as the anti-trust and the personal data privacy protection are also coming to the picture […] In short, the age of (exponential) growth in the wilderness for internet finance is over — and that’s the reality the fintech investors have to embrace.”

Don’t Focus on US Election

Currently, no clear winner has emerged from the US presidential election and the race has become more a dogfight than the landslide Biden supporters were expecting.

While many in the markets have their eyes firmly on whether President Trump will serve another four years or if former Vice President Joe Biden will assume the oval office—Liew argues that investors should not be “overly concerned about who is going to be president.”

The head portfolio manager instead recommends that investors analyze the fundamentals and valuations of firms at this point, as there are too many moving parts in the election.

FUSANG Exchange Lists First Publicly Available Blockchain-Based Digital Bond Backed by CCB

Asia’s first digital security exchange FUSANG is partnering with the world’s second largest bank, China Construction Bank (CCB) to offer the first ever digital, tokenized, blockchain-based bond.

FUSANG’s First Digital Security IPO Revealed

CCB and FUSANG Exchange, Asia’s first digital securities exchange, take the lead to bring to market the first blockchain-based digital bond accessible to global investors

The bond, Longbond SR Notes USD (LBFEB21), is to be provided by CCB Labuan Branch at a discount and will be listed on the FUSANG Exchange on the Ethereum blockchain, supporting trading in USD or BTC. Regarding the digitalization of assets and its connection to cryptocurrencies like BTC—FUSANG Exchange CEO Henry Chong told Blockchain.News:

“There are a lot of people today trading crypto, and there are a lot of people who are licensed to list and trade securities on traditional stock exchanges, but as far as we’re aware, no one is actually directly bridging the two.”

This CCB bond represents the first digital security to be listed on a public stock exchange that is directly accessible to the public. This is an important step along the path towards the adoption of Fintech within traditional financial institutions, and further testifies to the value of blockchain technology in digitalizing traditional assets and utilizing cryptocurrencies.

What exactly is a digital bond?

As opposed to other digital assets on the market, this digital bond is a real digital asset in substance. Mr. Chong explained how the asset works as a traditional bond that has been “tokenized” and issued on a blockchain, as compared to other bonds issued by banks that are referred to as “digital” merely because they are exchanged via a mobile app, but aren’t actually held digitally. The difference is that one asset is fundamentally digital and written into the blockchain, while others are just exchanged via a digital medium.

Financial Inclusion through Digital Securities

The motivation for transforming traditional securities to digital ones lies in increasing their exposure to global retail investors, not just accredited and institutional investors. Mr. Chong stated, “What we’re bringing to the exchange is full transparency in the way that it’s not only a public IPO, but that both retail and institutional investors can buy in on a level playing field…global investors can now benefit from access to an investment previously reserved for only the largest institutions, together with low and transparent fees.”

This also speaks to FUSANG’s stated mission of financial inclusivity, allowing everyone from millionaire institutional investors to retail investors to have access to all kinds of securities and digital assets on a decentralized blockchain.

CCB originally approached FUSANG with the idea of creating a digital bond, which was born out of the recent Chinese financial interest in blockchain technology. According to Chong, CCB was instrumental in supporting their technological endeavor while helping with the legal and regulatory hurdles of the IPO process.

The Start of Crypto 2.0

“Crypto 2.0,” according to Mr. Chong, refers to the institutionalization of digital asset products ranging from securities like shares and bonds, to other assets like commodities and real estate. Essentially, in Crypto 2.0 any exchange of value can be tokenized and represented on a blockchain.

On the idea of “Crypto 2.0” and expanding crypto to include more than just currencies, Mr. Chong said:

“Blockchain based assets like Bitcoin were magnificent proof of concepts where they show that we could use this technology to represent assets, and that we could provide the blockchain that acts as a radically different record keeping settlement. I think assets like Bitcoin are very interesting, but as a company, our focus has always been on securities.”

Using blockchain and cryptocurrency to digitalize value will have a revolutionary effect on our economy, and will greatly enhance investors and others’ ability to transfer value. Chong remarked, “you can use the technology to represent all kinds of assets. I think we are showing the digital asset world, and the financial world in general, that digital assets don’t need to be wild, volatile, and risky things.”