Mt Pelerin: The Tokenized Bank Project
Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry #27.
In this interview, we are welcoming Arnaud Salomon, the founder & CEO of Mt Pelerin.
Arnaud began his career in Geneva as a trader, first in commodities then in forex. At the end of 2012, he discovered Bitcoin and the world of the blockchain and cryptocurrencies. Quickly convinced by the vast potential this technology had to unleash innovation, he began to think about how it could be applied to the industry he knows best: finance. The project that would later become Mt Pelerin was born in 2014.
Enjoy the Interview!
- Please tell us about your Security Token？
The MPS token, which stands for Mt Pelerin Share, is the first token to be fully and directly equivalent to a company’s share and indissociable from it. Owning a token means having full voting and dividend rights, and direct ownership of a share of Mt Pelerin Group. Most of other security tokens provide indirect ownership of equity, by emulating shareholder rights through intermediary contracts between the company and the investor. With the MPS token, the breakthrough was to legally turn the token into the actual support of the share. This means that the rights of the token holder are guaranteed and protected by Swiss law, and not by a weaker private contractual agreement with the company. This is game-changing for professional investors, as it gives the same legal robustness to a share-token as a traditional share. It is also game-changing for the public, as it gives them a simple way that didn’t exist before to access early-stage equity through a safe instrument that they can easily understand.
2. How will a digital investment bank help in financing and investment ？
By building a fully tokenized bank, Mt Pelerin is creating a unique platform where both individuals and companies will be able to issue, sell and trade tokenized securities in a few clicks and in a single place. Not only equity, but also loans, bonds, and so on. Mt Pelerin will be a big marketplace where buyers and sellers will be able to find each other easily without having to worry about technical or compliance aspects, which will be all automated in the background. This structure effectively creates a simple and cheap access to the financing and investment tools big banks and corporations use every day, but which are too complex and expensive for anyone else to use today. With this easy access and direct connection between buyers and sellers, capital will be able to circulate in a more fluid way between the crowd. People will be able to handpick the types of business they want to invest into, and companies of all sizes that will be able to address a diverse and global audience to raise funds.
3. Compared to traditional Banks, what new advantages will blockchain banking system bring to the banking industry?
The IT systems of today’s banks rely on legacy technologies, which makes it difficult to introduce automation technologies. That difficulty to automate generates enormous IT and operation costs, which heavily impacts banks’ bottom lines. With a blockchain banking system, all the operation assets that are on the bank’s balance sheet (which are contracts) become replicated in the form of tokens and smart contracts can therefore be applied to them. Such a system represents a great opportunity to reduce costs, by automating how these contracts are executed and how they are reported within the bank and to other institutions that may be involved in those contracts (for example in the case of syndicated securities). Because Mt Pelerin uses a public blockchain (Ethereum), this system also means that the bank’s balance sheet is fully transparent, with its total state publicly visible in real-time.
4. Is there any cooperation case you can tell us about “how Mt Pelerin help a company in financing by this new technique” ？
While we are applying to a banking license in Switzerland, we have started offering services to help other companies replicate what we did with the MPS token, i.e. raise funds from the crowd with an equity token. We offer very competitively priced services like turnkey Swiss company tokenization, security token offering, investor KYC/AML and fund collection accounts, which is a unique set of service in the space. We launched these new services at the beginning of summer, and we have been working the past months with clients to prepare their upcoming STOs. You should be able to see (and invest in!) these first success stories in the coming months.
5. Is it difficult for a company that issued security token to obtain a banking license in Switzerland?
It has no particular impact on this since the security token we issued is actually no different than the equity of another company. With the MPS token, we have sold shares of our company (Mt Pelerin Group SA) to the public while complying to the Swiss public offering rules. It is a common and clearly defined security, sold through a common and clearly defined process.
6. How will MPS help in your services for banks?
Because it was a historical demonstration of the power of tokenized fundraising, the role of the MPS token is to be a real-world success story that stimulates adoption by other companies. With it, they have a bulletproof model of tokenized equity that they can easily replicate to sell equity to the crowd and provide full shareholder rights as defined by law. This ability for a company of any size to raise funds directly from the public with a legally robust tool like equity is revolutionary, as it blurs the lines between private equity, venture capital and publicly listed companies.
7. In your opinion, what changes and developments are taking place in investment Banks?
Most of them are caught in cycles of shrinking margins and increasing costs, precisely because of their practical limitations they face to innovate on the technological side. With the tokenized marketplace we are creating, we not only solve that problem for ourselves, but existing institutions will also benefit from it by being able to easily participate in this open ecosystem through simple tech gateways prepared for them.
8. Which exchange will MPS list on?
As you have understood, our ambition is to build a bank that integrates both primary and secondary markets for security tokens, so it will naturally become the main trading venue for the MPS token. Until then, if a properly regulated exchange with thorough compliance processes launches, then we will consider it for our share-token.
9. Is there anything else Mt Pelerin would like to share with Asian readers?
What Mt Pelerin wants to build is first and foremost the safest bank for its customers. Unlike other banks, Mt Pelerin will always keep the deposits of its clients in reserve and will never reinvest them somewhere else. Your money should always be safe from markets and crisis, and only you should be able to decide how it is used. This is why we will provide all the tools and options to decide how and where to borrow or invest money in a few clicks, straight from your bank account. We are convinced that the message of financial freedom and empowerment that this model carries will have a global resonance, and we are of course very excited to see its impact in Asia where people will be able to request a bank account in a few minutes online.
- Check Chinese version of this interview here
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