According to Coindesk's June 27 report, public blockchain tokens will soon be available for trading on a major stock exchange.
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Swiss Securities token company BlockState told CoinDesk that the company plans to introduce six ERC-20 tokens from Ethereum, the second largest public blockchain, to Corda's private distributed ledger technology (DLT) platform, Corda.
Before the end of the year, these tokens will be locked into Ethereum's smart contracts, and their "mirror" versions will run on Corda. This is similar to a global depositary receipt, where a company's stock is hosted in one country and a voucher representing its ownership is traded in another country.
In addition, the introduction process will take place on a network built by R3 for the Swiss Digital Exchange (SDX). SDX is one of the 13 national exchanges of the National Stock Exchange and the world. David Nicol, head of digital assets at R3, said:
“BlockState has seen exchanges and market infrastructure providers build new digital infrastructure on Corda, so they are getting involved. Their approach is to distribute tokens from Ethereum to Corda via SDX.”
The reason for this is to open a broader market for securities token issuers, including institutional investors who are reluctant to manage Ethereum wallets and prefer to leave custody to SDX. Blockstate CEO Paul Claudius said:
“If a retail investor can hold an ERC-20 token, he may not do so through a financial institution connected to the regulated secondary market. So I think this will combine the two investor ecosystems. together."
SIX declined to comment, but it has previously said that SIX plans to start currencyization of existing financial instruments this year and to launch new digital assets including real estate and fine arts.
Building bridges for public and private blockchains
This convergence of public blockchains and private blockchains clearly shows how the industry has changed. A few years ago, Ethereum and R3 were also at the two end points of the decentralization field.
Ethereum is open to all adopters, while R3's Corda is designed with banks and regulated entities in mind. The two communities also criticized each other. R3 said that the public blockchain is not suitable for business use, and Ethereum developers have turned R3 into a beautified workflow database.
But a year ago, when open source developers started working on tokens equivalent to the Ethereum ERC-20 standard to create tokens representing various assets on Corda, things changed.
Now, BlockState's own securities token products are under development, which will be the first pilot product to be integrated into Corda. The company also plans to issue five other tokens, the next product from the company Streetlife, which focuses on "urban music and lifestyle." Other industries where BlockState will tokenize assets include real estate and sustainable energy.
In addition to issuing tokens on Corda, BlockState also registered them as securities in Switzerland. Switzerland is known for its favourable regulations, large private banking networks, family offices and high net worth investors, who are likely to purchase such novel digital assets at any time. Nicole pointed out:
“This is a form of regulatory-friendly securities registration. You can find a blockchain directly and supervise the recording system. In an area where execution capability is almost everything, BlockState is really developing too fast.”
Claudius explained that there are “uncertified stocks” in the Swiss capital market law, according to which stocks can be directly linked to tokens, tokens represent stock ownership, and shareholder registers are basically kept in the district. On the blockchain. He said:
“Swiss regulations are not very relevant to technology. The issuance of uncertified stocks does not require a central securities depository to be recorded on the global paper ledger. Because this is not necessary, you can do it on a piece of paper or Manage your shareholder roster on a distributed ledger, but they don't really care about this."