The platform would supposedly make it safer to invest in tokens.
In a release, the Canadian Securities Exchange (CSE) has announced that they are working on North America’s first blockchain-based platform for clearing and settling securities. Through the platform, companies can issue tokens representing conventional equity and debt through what they call “security token offerings” (STO).
The process is expected to substantially cut down on costs and errors, while affording investors with real-time clearing and settlement instead of the conventional two-business day wait. While the move seems promising, the CSE still has to file for regulator approval of the clearing house.
The platform aims to take over what we now know as initial coin offerings (ICO’s), and hopes to garner better investor confidence by subjecting all token sales to compliance to regulations and protocol review before being traded.
“This is a landmark announcement for the Canadian capital markets. The Canadian Securities Exchange expects to be the first recognized exchange in Canada to introduce a fully developed blockchain platform for trading, clearing and settling tokenized securities,” says CSE CEO Richard Carleton. “Our platform represents an intersection between blockchain and the capital markets that delivers on blockchain’s promise to disrupt conventional transaction and record-keeping mechanisms, thereby providing tangible benefits for market stakeholders. By harnessing this technology, the potential exists to extend corporate finance beyond the limits of traditional equity and debt offerings. We look forward to working with regulators and with corporations seeking to raise capital through STOs to fully realize the benefits of the new platform. We believe it represents a tremendous opportunity for stakeholders in the Canadian marketplace.”
The exchange is targeting both corporations and individual investors, and is hinting at opening itself to international traders as well.
“The inherent benefits of blockchain-based clearing and settlement services apply to large, established companies as much as they apply to start-up entrepreneurs seeking to access the public capital markets for the first time. Accordingly, the platform has the potential to raise the global profile of the Canadian capital markets and introduce the CSE to a much larger stakeholder base in Canada and around the world,” they wrote in the release.