Global Stock Exchange Group, a Gibraltar-based fintech firm that deploys blockchain solutions to drive interoperability between the cryptocurrency and traditional markets, launched its Grid tokenized securities platform in Estonia on May 7.
The Grid facilitates the tokenization of new and existing debt securities and funds. The Global Stock Exchange group, or GSX, also plans to launch equities during the second phase of its roll-out. The platform also allows tailored smart contracts to underpin each digital security.
Cointelegraph spoke to the chief executive of GSX Group, Nick Cowan, to find out more about the Grid platform and his predictions for the tokenized securities markets.
GSX launches asset tokenization platform
Cowan described the Grid as “the first step in a phased development approach that commenced during 2018,” comprising “a venue for the creation and deployment of tokenized digital securities. dubbed ‘smart securities.’
GSX operates offices and trading venues in Gibraltar, London, SIngapore, and Hong Kong. The firm envisions that its tokenized securities ecosystem will expand to offer “pan-jurisdictional interoperability” featuring end-to-end exchanges.
“This is a key benefit of the GSX Group smart securities system,” said Cowan. “It is part of a capital markets vision, where post-issuance on the GRID, tokenized digital securities are able to be admitted for trading on one of GSX’s tokenized securities trading venues — subject to relevant regulatory permissions and qualifying conditions.”
EU-based offerings created using Grid can apply to be listed on GSX’s Gibraltar-based trading venue.
The next five years will be critical for DLT adoption
Cowan believes that the material benefits that tokenized securities and blockchain technology offer the capital markets will drive institutional adoption over the next five years.
“As with any disruptive technology, adoption is the largest barrier to overcome, but it is our view that the benefits for the capital markets sector are so material that all participants in the capital markets sector — issuers, institutions, investors, broker dealers, and member firms alike — will start to look more closely,”
Gowan estimates that security tokens offer roughly $300 billion in annual cost and efficiency savings to the legacy securities sector. This is in addition to “the capital that will be released back to the market participants in a pre-funded environment.”