Companies and investors are expected to ensure that tokenized securities can be easily tracked and traded. There must also be a possibility for it to exchange as traditional stock shares.
Young and Promising Abacus
Abacus is a young company, it passed through Y Combinator this past summer. There are also hopes that the technology can breakout soonest. Founder and CEO of the company, Pradyuman Vig, believes Abacus can automate compliance for tokenized security transactions.
It can also keep track of the chain of custody of private securities. This will make it simple for the SEC to audit the history of these securities transactions. Vig informed the public that Abacus will facilitate the issuance, administration, and settlement of tokenized financial instruments. This will use the blockchain technology.
According to Vig, the company’s goal is majorly to make it easier to buy and sell private securities. This will accomplish through a transparent means. It strongly believes, that if plans execute as per expectation, it might be a great one.
This is because traditionally, funds and companies experience liquidity incidents when they acquire, sell or go public. Due to the large volume of money invested into the private market in the last decade, companies have changed policies.
Most companies have moved these liquidity incidents to longer periods of time. This change in policy gave rise to secondary sales. But, Abacus believes it can usher in another means for startups and funds to exit their holdings. Although, it’s through secondary markets for tokenized securities.
Still One For The Future
Presently, developing a secondary market for tokenized securities seems very unlikely presently. According to TC columnist, Jon Evans, Bitcoin worth $19,000 at this time last year is now $3,500. Sadly, other cryptocurrencies are experiencing the downturn.
To him, what’s left of the crypto sphere is a giant casino of penny stocks with little to no utility outside of financial speculation. It’s important to note that, the company depends on when it’s enough for startups and investors to move towards tokenized securities. The sooner, the better for Abacus.