Australian Securities Exchange moves toward trading in tokenized assets
Following a successful proof-of-concept experiment sponsored by the digital asset investment platform Zerocap, companies listed on the Australian Securities Exchange (ASX) may soon be able to trade tokenized bonds, equities, funds, or carbon credits.
The trading and settlement of Ethereum-based tokenized assets is now possible thanks to Synfini, the Melbourne-based digital asset investment platform Zerocap informed Cointelegraph on Monday. This was done as part of a trial program.
The pilot is a component of ASX's Synfini DLT-based settlement project, which was introduced in November. The platform enables users to create blockchain applications by giving them access to ASX's DLT infrastructure, data hosting, and ledger services.
It happened last year, according to Ryan McCall, co-founder and CEO of Zerocap, and "it garnered a lot of interest" in the institutional space, notably from businesses looking into ways to tokenize and trade bonds, funds, or carbon credits:
Beyond Bitcoin, Ethereum, and other crypto assets, there is a strong value proposition here that we can essentially tokenize any asset and bridge it into the ASX ecosystem. This includes bonds, shares, property, carbon credits, private equity, and anything that is essentially illiquid.
According to McCall, businesses dealing with particularly "opaque and difficult to access markets" like bonds and carbon credits are looking for effective ways to reduce costs, shorten the issuing process, and broaden investor access via tokenized offerings.
When asked if the ASX will be able to offer cryptocurrency trading through Synfini, McCall replied "absolutely," but he added that he hasn't noticed any signs of interest in this area because the ASX and others are largely focused on tokenizing traditional/real-world assets.
However, it should be noted that Synfini is a different project from ASX's blockchain-based CHESS system replacement, which has not yet been put into use due to years of technical difficulties.
McCall went on to say that since Zerocap has recently completed the requirements for legal approval, it may soon be planning to officially introduce asset tokenization and trading services via Synfini to institutions.
Since then, we've been undergoing the certification process to enter the production environment, which, as you can surely understand, is a quite rigorous procedure for any type of corporate software, but is especially so for an exchange. We recently passed the manufacturing certification, so. Consequently, I'm about to launch this," he stated.
McCall also said that using the ASX, a renowned venue for hosting digital asset trading, will probably allay institutional worries about counterparty risk related to the cryptocurrency industry.
As a result of several significant cryptocurrency companies this year either experiencing liquidity challenges or going totally out of business, such as Celsius, Voyager Digital, and Three Arrows Capital:
"So with the 3AC debacle, counterparty risk, specifically credit risk, is probably the biggest talking issue in cryptocurrency right now. And in my opinion, that merely illustrates the purpose for which the ASX is attempting to serve.
There is unquestionably a need for something similar in digital assets, he continued, "thinking about the ecosystem and investor protections and all the things that it brings."
The CEO of Zerocap added that a variety of enterprises are likely to adopt Synfini because the platform is user-friendly and takes many variables out of the equation for businesses.
"This Synfini platform is very fantastic," he said. "If a custodian, a fund manager, or any application developer wants to come and build a blockchain application, they can do that without really having to worry about managing any of the infrastructure.
Late in June, Zerocap participated in a tokenized carbon credit exchange, offering market-making services and liquidity for a trade between the significant Australian family office Victor Smorgon Group and the blockchain-based carbon trading platform BetaCarbon.
A$DC, a stablecoin created by "big four bank" Australian bank ANZ that is entirely AUD collateralized, was also used to effectuate the transaction.
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