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November 25, 2020

Market Spotlight

Discussing progress with securitized tokens with Archax


Progress So Far With Tokenized Securities

DeFi is getting all of the attention in the crypto space lately, but security tokens have been gaining momentum in their own right. Matthew Pollard, co-founder at Archax, explained:

(28:37) “DeFi is a very hot area at the moment. It feels like security tokens really started to come to the fore in 2018. And lots of work has been going on all across the world in the security token space. There were the first movers like Tzero and then there are kind of other exchanges across other countries including Archax. And I think you’ll see if you look at the security token space’s market cap and if you look at the volumes you’ll see a trend upwards. And I think the last three, four months it’s really started to explode — the space — as people got a bit more familiar with what the technology means and how to interact with it.”

There are several narratives surrounding a lack of demand for security tokens. Pollard addressed whether the demand side for security tokens has picked up, saying it’s definitely a nascent space and commending the efforts of projects like Tokensoft and Globacap in the US and the UK working with regulators. He added:

(36:35) “We have had our ear to ground in the space over the last two years. And we have five or six companies that have pre-listed to list with us when we go live. And the total asset size of those is in the hundreds of millions. So there are companies that want to raise capital…so that side of the funnel is never going to go away, okay? So the leap is taking the capital markets industry and thinking, how can we make it quicker, reduce friction, reduce cost and over the lifecycle of the security existing, how can we show everybody that doing it on blockchain is better? What this space needs is more interesting assets.”

(38:04) Pollard added that he’s looking at SPACS and he wants to know what Archax can do with them in terms of listing.

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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