The Swiss security tokenisation provider BlockState has announced that it will launch its asset tokenisation platform issuing its own digitised company equity. The announcement comes shortly after BlockState unveiled one of its first clients to conduct an STO, the European urban music promoter Streetlife International. BlockState’s digital company shares will be on public sale starting 18 June 2019 for a period of three weeks.
BlockState’s goal with the equity issuance is to showcase the entire security tokenisation and investment process from start to finish, enabling institutional, professional and retail investors to participate in a public equity round. It has the support of international investors in the finance industry and advisors from brands like Airbnb, Google and several investment banks including Credit Suisse and Pictet. Patrick Storchenegger, board member of the Ethereum Foundation, is also behind the venture. BlockState will raise a total of €2 million for further technical and business development activities.
“Issuing our company equity on our own platform really demonstrates the value of tokenisation for SMEs and other non-bankable assets. The ease with which issuers and investors can be connected compared to the complex, bloated value chains of traditional capital markets is nothing short of disruptive,” Paul Claudius, co-founder and CEO of BlockState says. “We are thrilled to see our own issuance become an example case for the wider market and are even more excited about the trust placed in us by the many international clients in our pipeline.”
Tokenisation: a new standard for fundraising infrastructure
BlockState addresses the global financing gap for unbankable assets using security tokenisation, which according to data from the World Bank Group amount to $8tn. Security tokenisation enables entrepreneurs and asset holders to access global capital markets at significantly reduced costs, breaking down barriers to entry for issuers as well as investors.
Security tokens are digital representations of existing regulated financial products. Using blockchain technology and smart contracts, security tokens can be programmed to enable shareholder rights like dividends and voting without the need for costly intermediaries. Security tokens can be issued at low cost and split indefinitely to allow smaller investment tickets. The easy and instantaneous transfer between parties paired with a growing demand for tokens on the issuer and investor side holds the promise of more efficient secondary markets.
Creating a new fundraising ecosystem
In addition to the legal and technical setup for a digital issuance and interfaces to manage investor communications and corporate actions such as dividends or votings, BlockState provides access to an ecosystem of financial service providers such as private banks and secondary markets for digital assets to directly connect issuers with investors. The BlockState solution operates on the Ethereum blockchain and is set up to accommodate interoperability with R3/Corda, to ensure compatibility for institutional investors and financial intermediaries.