Globacap, a financial technology startup leveraging blockchain for efficient capital raising, has announced the issuance of digital tokens representing equity ownership. This process, known as “tokenisation”, was completed using the proprietary Globacap blockchain platform, under oversight from the UK’s Financial Conduct Authority (FCA) as part of the FCA Sandbox Cohort 4.
Globacap has created a public blockchain token that forms a legal shareholding under UK company and securities law. Globacap was advised by legal firm Hogan Lovells while creating this innovate structure.
Globacap’s technology creates a digital token that itself forms the legal shareholding in the company. The token’s in-built processes facilitate further transactions by automatically fulfilling the administrative and legal requirements of an equity ownership transfer under UK company law. Such transactions are recorded on the token’s underlying blockchain. This is different to other types of equity tokens that merely provide a digital receipt of equity ownership.
The tokenisation process can be applied to most asset classes, effectively providing a means of digital securitisation. Because the digital tokens are easily transferable, including on traditional exchanges, this is transformational for the private investment landscape because previously illiquid investments can now be transacted efficiently in seconds instead weeks, and with minimal overheads.
Globacap is at the forefront of providing a more open capital market, leveraging blockchain technology, to encourage investors of all sizes to participate in private investments previously only accessible to institutional investors. This is expected to spur a new wave of economic growth as previously illiquid investments suddenly become accessible.
Blockchain is becoming increasingly recognised as a stable and innovative technology that can transform the financial services sector, offering greater security, efficiency, and accessibility. The Globacap platform leverages blockchain to bring capital raising and asset administration into the digital world.
The Globacap platform tokenises illiquid assets, and provides end-to-end capital raising, custody, and administration services.
The Hogan Lovells team was led by corporate transactions partner, Richard Diffenthal, and financial services regulatory partner, Michael Thomas.
Myles Milston, CEO of Globacap, commented, “This is a transformative milestone for the securities industry, paving the way for private companies and projects of all sizes to more efficiently access a wider pool of global capital. The Innovate team at the FCA have been pivotal in this milestone, allowing us a quicker route to launch our proof of concept while having regulatory oversight.”
To hear what Jeff Sweeney thinks about tokenised securities, read his article; Will Blockchain Tokenised Securities Make IPOs Obsolete?