Blockchain’s potential to revolutionize financial markets is sometimes embellished by some and understated by others; but when it comes to the securities industry, it’s hard to envision a future where blockchain technology does not play a central role. Consider how only 50 years ago investors were physically buying, holding and trading paper stock certificates, instead of transacting through electronic brokers and third-party custodians as we do today. Blockchain represents the next logical step forward in helping to remove many of the inefficiencies involved in the tracking, managing and exchanging of securities.
Furthermore, as investors continue to shift their attention away from public equities and into private assets like real estate, shares in private businesses, private debt and other alternative assets, blockchain can and will be vital to helping broaden access to the private markets. Currently, private markets suffer from a lack of transparency and liquidity; there is no standardized way for investors in private assets to maintain and store records of ownership, or securely transfer ownership through secondary transactions.
This is where digitized securities (i.e. “smart securities”) can play a significant role in not only bringing efficiency and transparency to private securities but also broadening access to new asset classes. Leveraging blockchain technology, smart securities can create a decentralized database of virtually any asset class, and allow for paying out dividends and transferring ownership through a few simple lines of code.
Which is why at Templum, our mission is provide a secure, regulated platform for the issuance and trading of smart securities. As former securities professionals ourselves, we believe smart securities represent the next logical evolution in the trading of securities. As capital continues to move from the public to private markets, smart securities and blockchain technology will be vital to bringing transparency, standardization and liquidity to private assets.