Oz clearing firm FinClear launches FCX blockchain for unlisted stocks – Ledger Insights
Today, FinClear, one of Australia’s largest listed securities clearing firms, has gone live with a blockchain-based platform for tokenized unlisted securities, FCX. It uses Digital Asset’s Daml smart contract language, the same one used in the discontinued ASX CHESS replacement.
One of Australia’s big four banks offers a feature to automate money movement between a bank account and cash in an FCX wallet. The tokenized cash is then used to settle stock purchases instantly and atomically. We don’t know which bank is involved in FCX, but ANZ was involved in a stablecoin project earlier this year.
Going back, FCX allows private firms to use the platform to issue new tokenized shares to investors. Supported by distributed ledger, a company can manage the entire process, including offering information, documents and settlement, and provide access to potential investors. When an investor pays for the share, it is instantly displayed in the FCX wallet. The issuer can monitor the entire process.
The solution enables companies to easily manage the list of investors, the cap table. And FCX plans to enable secondary trading of private equities next year.
“The FCX platform combines technological and regulatory expertise and rigor to securely tokenize securities, which is a completely different proposition for a cryptocurrency,” said David Ferrall, Founder and CEO of FinClear. “We use our extensive experience in highly regulated, publicly traded markets to provide private companies and investors with the security they deserve.”
Three companies are using the platform so far, including FinClear itself, givvable and Circle In.
While blockchain is often seen as democratizing finance, as with many other jurisdictions, Australia limits access to private company offerings to ‘sophisticated’ investors, equivalent to accredited investors.
Some view unlisted securities as low-hanging fruit for distributed ledger applications. That’s because of the efficiency of the public markets and the increasing number of unicorns that remain private. In the US, DTC is moving forward with its Project Whitney with plans to launch a private equity and digital asset solution, the Digital Securities Management (DSM) Platform, subject to SEC approval.
Some of the more institutional offerings include Switzerland’s daura, which has partnered with SIX Digital Exchange, ADDX in Singapore, and France’s LiquidShare, which also uses Daml. There are several public blockchain security platforms, such as iStox, Securitize and Tokeny.
