Securitize And The Asian Market
Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry # 21.
Jacqueline Kwok (JK) is the director (APAC) at Securitize, she spent the bulk of her career in private equity with a focus on fundraising and growth equity investments within TMT, manufacturing, and consumer industries in China. JK managed international market expansion for a Rocket Internet-backed startup, which took her from Berlin to Chicago. After investing in crypto assets during her tenure in VMWare’s Networking and Security team, she has focused all her efforts within the blockchain/crypto space working for a custody startup. She has an MBA from INSEAD, and started her career at the KPMG Hong Kong Office.
Today, JK is talking with us about Securitize，the well-known security token issuance platform，and their way to strengthen its presence in the Asian Market.
- Recently, we have heard the good news about the cooperation between Securitize and Japan digital securities association (JSTA). Congratulations, what progress has Securitize made in this cooperation?
Japan is the third-largest economy in the world and a major global financial hub. We always look to join forces with high-quality groups such as Japan Security Tokens Association (JSTA). Securitize and JSTA are working on a strategy for how our technology can benefit issuers and investors in Japan.
2. In your opinion, What enlightenment will the development of Japanese digital securities bring to the whole Asia?
I think all of Asia prefers to wait and see what other countries do, so it is great to see Japan taking a lead across issuers, investors, regulators, financial institutions big and small. We are working in multiple jurisdictions in the APAC region and it is impressive to see Japan so unified across all stakeholders regarding digital security technology. It is clear that Japanese stakeholders want to proactively push the digital assets and securities industry forward. They are taking all the right and prudent measures to understand the demand, technology, compliance, and Japan’s role on the global stage.
3. As a well-known digital security issuance platform, what is the biggest advantage of Securitize?
We have 2 advantages:
（1）. Our track record on providing primary issuance and lifecycle management for our clients. We have onboarded investors from 45+ countries and have enabled offerings for issuers domiciled in various jurisdictions including US, Cayman, Singapore. Lots of companies claim to be an end-to-end token issuance platform. We put our money where our mouth is, on the blockchain:
SPiCE VC (spice)
22x Fund (22x)
Blockchain Capital (bcap)
Science Blockchain (sci2)
Lottery.com Token (LDCC)
Protos Token (PRTS)
Cityblock Capital (NYCQ)
（2）. All of our clients have the option to have their tokenized security or asset traded on secondary marketplaces, such as OpenFinance, Sharespost, tZero, and more for further liquidity. Of the issuances we did, 5 are trading in at least one of the aforementioned marketplaces.
We not only provide the tokenization engine but also cap table management and transfer agent capabilities, so that issuers can manage their investors and shareholders from one portal. This allows issuers, investors, and traders to compliantly transact through a streamlined process.
Last but not least, we’re also backed by large global players in the blockchain space, such as Blockchain Capital, Coinbase, Ripple, Global Brian, and OK Blockchain Capital. These investors have been so helpful in our business.
4. we can see there so much cooperation between Securitize and other entities, And last month, Securitize introduced DS (Digital Securities) protocol, What does this mean?
Actually, the DS Protocol has been deployed for almost a year now, it’s what allows for compliant secondary trading simultaneously across multiple regulated marketplaces. And it’s blockchain agnostic so it works on both public like Ethereum and Tezos and permissioned blockchains like or IBM’s Hyperledger or Quorum.
Cooperation in the industry right now is a must. We must collaborate with other entities to bolster the ecosystem. This is a very new industry and we all have to help each other towards the same goal: Tokenize everything! We are creating a better experience for developers who also believe in this mission as well:
Developer Site: https://developer.securitize.io
5. In addition to the United States, where do you think the next place in the digital securities market will break out? Why?
We see a lot of activity in the UK and Switzerland. These are major financial hubs and sources of capital that are looking to advance innovation for the financial industries. We’re also focusing our efforts to establish a strong foundation in trusted jurisdictions around the world.
6. Securitize currently has much cooperation in Asian digital securities market.
Yes, as I mentioned before, Securitize considers the whole APAC region as a tremendous market for digital securities. We are always looking to cooperate with high-quality local partners to help advance the industry and build out the ecosystem.
7. What does Securitize think of the Chinese market? What attracts you most about the Chinese market?
China’s market is very interesting to Securitize, and even more interesting for me personally. For digital securities, there is a demand-side and a supply-side. On the demand side, individual Investors with Chinese passports definitely cannot invest in tokenized securities. The PRC government has made that very clear. On the supply side, however, there are global companies with a big operating presence in China that have done global offerings with their off-shore entities, for instance, Cayman Islands, BVI, Hong Kong, Singapore, and the US.
The most attractive part of the Chinese market is actually with the (Chinese) Greater Bay Area initiatives. As we know, there are more and more unicorns in China and there are many people in the world who would want access to these deals with no avenue to do so. With Securitize’s technology and blockchain, projects are more accessible. I look forward to the day when users of Ant Financial can buy tokenized assets around the world from their phone.
8. What are the usual difficulties and risks involved in securitizing the issuance of assets from China?
The difficulties and risks are usually around the quality of the deal itself and where the investors are coming from. Chinese passport holders cannot invest in tokens. As someone who has spent most of her professional career in Mainland China, I really hope the decision-makers of the Chinese capital markets take notice of this technology so that we can build a better foundation for capital markets.
9. Any suggestions for issuers from China?
Be cognizant of global compliance if the issuers in China care about putting their company or asset on the global map, and fundraise from an international pool of investors. If China wants to lead in fintech, issuers should lead the way not wait for other countries to blaze a trail. This is a very new industry, and there are so many smart people in China that can figure out how to best present a tokenized deal to the world. Reach out to us and ask questions, this a new industry, and there are no stupid questions.
10. Many people think that the biggest problem of digital security industry is the lack of liquidity. What do you think? As a leading issuance Platform, how do you solve this problem?
Lack of liquidity is a hurdle for the growth of the entire ecosystem: from broker-dealers, issuance platforms, marketplaces, and custodians. However, I do think that this is a short-term “problem” that will be solved within 12–18 months.
We have to band together and educate skeptics of tokenization. Aside from the few and far between exciting projects in the space, the lack of liquidity we have today is because the marketplaces where liquidity would take place launched less than 12 months ago. It takes time for an orderbook to build, for any platform to gain users, and more importantly, obtain licenses. I think the biggest problem is the crypto people are looking at the digital securities industry and expecting the same level of liquidity of a crypto exchange or NYSE.
11. What is Securitize’s next plan?
Securitize’s next 2 initiatives are to continue building out the product that resulted from being chosen to join IBM’s Blockchain Accelerator, and to port what we have on Ethereum onto Tezos. With IBM, we are building infrastructure on Hyperledger Fabric for transacting in various fixed income financial products.
Furthermore, Tezos has been a great partner of ours in helping us with developing Securitize’s platform on the Tezos protocol. Tezos will be a major player in the space and we are grateful for our collaboration.
- Check Chinese version of this interview here
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