Guest post by Mike Kessler, Founder and CEO of Tokenise, a fully regulated dedicated tokenised stock exchange on a mission to democratise investment through the tokenisation of assets using blockchain technology.
Let us begin with why we wanted to improve financial inclusion and democratise finance in the first place. We saw multiple problems with traditional forms of investment. For businesses, it is near impossible to get funded through capital markets if you are a small to medium enterprise. That’s because of the insurmountable costs of IPO compliance and other fees. For investors, there is a lack of diversity in asset classes. That’s combined with limited access for the average person looking to invest.
Finding the right solution: tokenisation
Our solution is the Tokenise Stock Exchange. It is a fully regulated international digital exchange which makes it faster to list on the market, and at a reduced cost. Gone are restrictions, as we will be listing new asset classes as well as more traditional types – but as tokens. These will be available to both retail and experienced investors on a global scale. 24 hours a day, 7 days a week. Through this, we will be enhancing the ability of individuals and institutions around the world to participate in direct ownership of tokenised securities. This could be, but are not limited to, fractions of NFTs or art funds. Even a slice of a back catalogue of world-renowned musical artists or funding one of their future projects.
Digital assets are gaining regulatory and institutional acceptance worldwide. We therefore believe now is the time to democratise investment through the tokenisation of assets. Utilising blockchain technology as a ledger, transactions are securely recorded and publicly available to view. However, the tokenisation of assets could be hugely advantageous to issuers as well as investors. This is because issuers will be granted access to an untapped pool of investors. Their listing will be active 24/7, meaning investor’s orders can be executed day or night.
Tokenisation of assets
Through the tokenisation of assets, it will be possible to unlock liquidity in illiquid assets. For example real estate or artwork by selling tokens which represent the fractional ownership of them. The possibility of trading tokens on the secondary market further increases accessibility to new investors and the opportunity to sell or buy more tokens. The Tokenise Stock Exchange is a platform which is designed to break down the barriers and bring investment within the grasp of all, no matter where in the world you are. Operating 24 hours a day 7 days a week, this exchange is always ready to bring to fruition your investment dreams.
We have discussed how the tokenisation of assets can democratise finance, but how does it improve financial inclusion? By opening a world of investment possibility to groups of people who are not usually invited to the party. What can be tokenised is ultimately limitless. We are in conversation with some big fish in the entertainment, art, and Medicinal Cannabis industries to name a few. Tokenised assets will make it possible for enthusiasts in these various fields to be part of the growth of that industry. All the while being able to nonchalantly say that they have invested in something they genuinely believe in.
The same goes for renewable energy. We are hoping to be able to offer fractional ownership tokens of energy producers. That way, they can receive funding to further innovate their practise, and environment-aficionados can be proud to be doing their bit too. Given the mainstream cultural influence these industries have on our society today, it is fair to predict that large amounts of people will show interest and want to get involved with this form of investment.
Tokenisation improves financial inclusion
This move towards improved financial inclusion will not only be beneficial for existing investors through the potential to diversify their portfolios. But also new investors from all wealth backgrounds would get the same opportunities. Furthermore, tokenisation means investors do not have to lump all their money together in one big investment. Which may then be tied up for a period of time. Instead, the asset can be divided into units as cheap as $1 which you can trade on our secondary market as soon as the next day.
That’s when we come in…
Tokenise‘s ethos is that everyone should have the ability to take control of their finances. Tokenisation makes that possible. Our platform will enable investors to do so by creating a simple user interface which is available 24 hours a day, 7 days a week, without geographical limitation. There are no middlemen required for an investor to access our platform. This will empower the global community to invest in initiatives they care about. Whether it is fractional ownership of an artwork or a renewable energy producer. Not requiring a broker also has the additional benefit of reducing costs for both the investor and the issuer. That’s because the transaction goes through fewer hands, meaning fewer fees. We feel this is a much-needed innovation to the marketplace and has the potential to democratise investing.
Our platform further improves financial inclusion by reducing costs for both investor and issuer because there are fewer people the transaction must go through. The fewer hands the cake passes through, the more of the cake is left. Consequently, investors get a larger slice.