By Zilliqa & MaiCoin, two crypto startups have joined forces, to establish a centralised security token exchange based in Singapore which will utilise blockchain technology to trade asset classes of the traditional variety.
In an announcement which happened earlier today, Hg Exchange’s goal is to become a “one-stop solution” for buyers, sellers, market makers and token issuers which will provide access to privately-held shares and tokens to their clientele.
The new exchange claims to the first “member-driven exchange” in the Southeast Asia region to attempt the merging of traditional finance industries with the crypto sector. This of course means, that any interested parties need to go through the licensed financial intermediaries who are involved with the exchange.
Furthermore, Hg Exchange stated that they hope to provide investors with access to new and established ventures:
“It is envisaged that Hg Exchange will provide access to high-growth startups and also decacorns [companies valued above $10 billion] such as Uber, Airbnb, Space X, Grab and Didi Chuxing, which are currently not within reach of the average investor.”
Hg Exchange also added that Zilliqa (who are aiming to launch their own blockchain mainnet as of the 31st Jan) would oversee the process of tokenization of private company shares on their network. Notably, there is already a standard which has been set for the tokenization of existing shares. As reported by CoinBeat, DX.Exchange currently lists Ethereum tokens which they claim to be backed 1-to-1 by publicly traded stocks which are held by third parties. Hg added that they will allow all founders, employees as well as shareholders to monetise any shares that they may own.
Alex Liu, MaiCoin’s CEO stated that by combining equity and other traditional assets with blockchain technology, it could “liquefy previously illiquid assets.”
The First Four Members:
Hg Exchange has currently signed a memorandum of intent with their first four members being Phillip Securities, PrimePartners, RHT Capital and Fundnel.
Kelvin Lee, CEO & co-founder of Fundnel, announced in a statement that potential investors in the future will be on the hunt for different forms of assets and products which are being driven by the growing adoption of digitisation.
He stated:
“The digital-first strategy adopted by Hg Exchange is envisioned to seamlessly connect private enterprises with the right investors, and also democratise the capital market by providing investors with a chance to participate alongside their institutional counterparts.”
In order for any financial intermediaries to sign up with the exchange, they will need to be licensed with the Monetary Authority of Singapore to conduct activities, stated Hg Exchange. Furthermore, Hg have also applied to be part of the MAS’ FinTech Regulatory Sandbox and stated that the usual approval process can take as much as a few weeks to a few months to be completed.
A Hg spokesperson also stated that only institutional or accredited investors will be eligible to participate at launch, although minimum investments are expected to be lower than that of current private investment platforms.
In addition to this, individual investors will need to go through one of the exchange’s members to participate.
Use Cases For The “Real World”
Zilliqa runs what they refer to as a “high-throughput public blockchain platform,” claiming to be able to solve scaling issues found within the sharding process, a process where a main blockchain is broken up into smaller, separate units in order to more efficiently process transactions.
Zilliqa CEO & Co-founder Xinshu Dong explained:
“Rather than blockchain for blockchain’s sake, it’s important to look at how blockchain technology can solve existing challenges holding industries back. “Within the private investment industry, blockchain can provide greater standardisation, fractionalization, and enables trading on a regulated venue at lower costs.”
He added:
“Our aim is to continue to focus on real-world use cases to accelerate the mainstream adoption of blockchain, and move the industry towards meaningful growth.”
On the other hand, MaiCoin, who are a digital asset exchange currently offering trading and payment services out of Taiwan will be responsible for the construction of the exchange functions which will include the order book and the matching engine.
Furthermore, on the user side of the coin, MaiCoin will also provide the multi-factor authentication as well as the transaction signing tech to bolster security.
Could Hg Exchange’s bold goals indeed be successful? Let us know your thoughts by leaving a comment below.
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