CoinMetro, Ignium and Tangible hosted an open discussion on digital securities on Friday the 24th of July at Singapore Blockchain Week.
Participants included: Kevin Murcko, CEO of CoinMetro and a thought leader in FX, crypto, blockchain and financial regulation. Reimo Hammerberg, CEO of Ignium and a capital markets attorney with decades of experience in finance law. Piloting Tangible, Evan Griffin, an Australian Commercial Airline Captain based in Asia with a desire to do things differently.
Joining in as well: Rachel McIntosh, a PR professional from Finance Magnates and many others, also a mezzo-soprano among many other talents. Darryl Parker, CTO of COG Network. And last, but not least, Zoran Djikanovic, Chairman of Capital Market Authority in Montenegro.
The discussion was insightful and speculated around the fact why the big promise of STOs becoming the next biggest thing in fintech innovation, however this for whatever reason has not manifested itself.
There are many misconceptions around STOs. In theory, it could be very easy, simply follow the structure of the capital markets, but in practice it doesn’t work. Structure of the market participants is different and this has been a very big learning point. These markets do not operate in the same manner. Creates a different set of silos and the logic from traditional markets does not transform into STOs as we’d expect.
Trust is another big issue in STO adoption. Regulators think that the best way of protecting investors is to stop them from investing. We all know that prohibition doesn’t work. Doesn’t work on drugs, doesn’t work on capital markets. People will always try to find ways to surpass barriers. This is exactly what happened in the ICO boom – Issuers found a way around it and exploited it. Regulators have since started to loosen the strings.
All of the experts in the event agreed that for things to change we need to educate at the highest level. Meaning at the regulator level. Regulators need to follow the laws of course but for these to be changed we need an understanding of the assets and industry from the top level. For the industry to move forward we need the regulators to understand how cryptocurrencies and digital securities work and why it is necessary to give investors access in a safe way.
Most countries don’t have an accredited status on investors based on their intelligence. They do it on money. Furthermore, owning a large amount of money does not necessarily mean that the investor is educated on the risks. There’s lots of money in the world but a lack of brainpower.
What we can all do is educate the lawmakers, this needs to happen for it to trickle down. People need to speak up – it is much easier now for everyone to have a voice thanks to social media. Twitter can actually make a difference. Everyone’s collective voice needs to be made heard. If you want access to the capital markets, you need to tell someone.
Montenegro is one of the first ones to really test this. CoinMetro, Tangible and the Capital Markets Authority in Montenegro have teamed up and are building a digital securities issuance, primary and secondary market within the sandbox of Montenegro. Get early access here.