My trip to the world of cryptocurrencies wasn’t straightforward. I spent two decades working in conventional banking institutions, trading forex for Morgan Stanley, Merrill Lynch, and others.
While handling trading books via devaluations in Asia, South America, and Iceland, I got to great points in my career. I spent my first career researching currency methods and reading between the lines of politicians. That’s because when you see what they’re avoiding to say, you know where the story will go.
In the forex industry, we’ve all spoken about ‘dirty shirts.’ The USD was widely seen as the ‘least dirty shirt,’ contributing to its eventual strength in periods of worldwide stress. But there’s a moment when you suddenly see that the ‘least dirty shirt’ is filthy.
I wasn’t the first to see this. Satoshi Nakamoto was the guy. In 2008 I saw for the first time central bankers act as elected officials. As bigger taxes and austerity seemed to be received in an unpopular manner, Congress did nothing. The Fed had to swoop in, and they did that with money printing. Ever since then, the pandemic highlighted economic uncertainties, and the printing of cash started anew, not monitored by officials and helped by worldwide zero or negative interest rates.
The idea of compounding interest has expired, and the rush of printed cash to fill economic loopholes has increased dramatically. The cleanest shirt wasn’t clean anymore. It’s been proven dirty. And that’s when BC became the lone opportunity. A preserver of life for your hard-earned money. In this day and age, drowning in printed currency, BTC provided common sense and total financial restriction.
With Bitcoin arrived our understanding that the distributed ledger provided additional advantages, a method to change industries with unnecessary 3rd party meddling’s. One of them is the securities sector. This is a sector that saw no improvement since the 1930s. One with lots of these third parties. When adapted legislatively, the blockchain deals with this and pushes forward the securities marketplaces to the present day.
In 2017, digital securities were restricted to those accredited investors, and there wasn’t a lot of those. Their future standing seemed uncertain. But, the initial coin offer craze proved to be a glimmer of hope. If that could be regulated, well, digital securities could be introduced to the world. They won’t be just limited to accredited investors, but open to change the world.
INX needed over 950 days to collaborate with the Securities and Exchange Commission to make the first security token open to every investor and retail, with no restrictions to the capital raise. Overall, this made for a new asset class, letting all properties move on the distributed ledger.
We are sure that the efficiencies arriving with blockchain tech will make for a new capital market for the next five years. No need for equities to have closing and opening times. Trading around-the-clock is unavoidable, and investors will ask for it. Issuers can view the maximum table when they wish to and present provenance for their digital shares during previous times. Issuers will be in the position to charge distributions straight to their investors with no need for intermediaries. Because all transfers are remembered on the distributed ledger, there will be no need for transfer agents.
There’s also a benefit for regulators. For digital assets and their independent, smart contracts, KYC, and AML restrictions are becoming unnecessary. Every security owner is identified, and the securities can just be moved to white-listed wallets. There are periods when securities could be moved from one person to another one for money laundering reasons.
Over the upcoming twelve months, INX is looking to shape security token trading in various methods. They built the first initial public offering on the distributed ledger, enabling the retailer to exchange security tokens with no lockup timeframes. They’re going to start educating the consumer on the infinite options that this represents. Over the course of 2021, they will conduct this by listing a wide selection of safety tokens. Each highlighting the potential of security tokens on many blockchains to unlock dead money, see new opportunities for investing and note new efficiencies.
In two years, we will see a mass migration happen. Issuers will move listings to digital ones to capture efficiencies, keep their investors, and diversify investors’ base. The fractionalized equity of digital issuers will be available and start affordability in the third world. This will resemble BTC in importance.
There were at first some macro traders who got in the game, then corporations and institutional investors. Cryptocurrencies are great since they help digital securities marketplaces via sharing knowledge on digital wallets and the distributed ledger. Cryptocurrencies are great, but digital securities could take over. It is possible that digital securities, currencies, fixed income, and other assets will become tokenized.