Nick Cowan, CEO and founder of GSX Group, talks about his role and being part of a Group that has blockchain as its core.
- When it comes to GSX, what are you most proud of?
It’s easy to get caught up in the day-to-day efforts when it comes to the progression of GSX Group. However, when I get a chance to sit back and consider how far we’ve come, what gives me a sense of pride, and purpose, is the work we have been doing on tokenised securities — we see this as one of the most disruptive opportunities to create a paradigm shift in the way securities trade and settle. Our stakeholders have all contributed to helping us to get to our current position, every day is another step forward to achieving our goals, and in that, I couldn’t be more proud of working with such a talented group of people.
2. Why did you decide to incorporate DLT into the Stock Exchange?
As a young exchange, we came to a fork in the road. Either we adopted legacy technology that exists today, or we challenged ourselves and embraced what we saw as the future in capital markets. The technology we have developed gives us the opportunity to transform the economic models which currently exist in all markets — so it’s a pretty exciting time.
3. What is GSX’s present goal?
Our objectives remain the same, to utilise technology to enable a lower cost of settlement, clearing and execution, which in turn reduces the cost of capital to issuers and investors alike. Providing a trading venue for tokenised securities is also a priority for us to add on to our existing listing of tokenised securities.
4. What do you see as the driving factors for institutional crypto interest?
In order for digital assets and blockchain to garner greater adoption, their needs to be more institutional participation. We have consistently said that regulation is the path toward that participation, which we are starting to see more of each day, with news breaking of larger firms in traditional finance becoming involved in blockchain, and the emerging cryptocurrency space. Facebook’s Libra is a perfect example, it’s challenging regulators and governments alike to take a position, which can only be for the betterment of that mainstream adoption in the long run.
5. How do you see regulation playing out globally?
Regulation is the key to bringing blockchain into the mainstream, we’ve moved from the ‘wild west’ period of rampant ICO’s and cryptocurrency hype, I feel now we’re seeing a more measured approach, to the real use cases behind this nascent technology. As I’ve mentioned, larger firms have begun to turn their attention to the application of blockchain into their business models, they see the benefits to their back-end systems, efficiency drivers that bring down costs. It’s always been an adage that regulation globally plays catch-up to new innovations, and Gibraltar is one of the leading lights in understanding and regulating DLT, as the first country in the world to build a DLT, principles-based, regulatory framework.
6. What was it about Blockchain that allowed you to see its potential in transforming the traditional financial industry?
It’s been more of a continual road of discovery, when we heard about blockchain and how it could be applied to the stock exchange and capital markets, it was in its early stages. We didn’t have all the answers, but we knew it had massive potential. Only now, after many years of learning and development, which saw the creation of the GBX and the development of the STACS Network, can we now fit the pieces together to provide a full solution to our clients within the stock exchange. GBX helped us explore how assets can be stored and transferred efficiently, safely at a very low cost. Adapting these processes to the highly regulated environment of securities will change the way markets have traditionally operated. The development of the STACS Network was entirely driven by our vision to be in front of these changes, and it has been designed with regulation and securities as the foundation rather than as an adaptation to an existing network, which we think is what makes it unique.
7. Gibraltar is taking a forward-looking approach to blockchain, are there any other jurisdictions that are taking the same approach?
When Gibraltar took that brave first step and produced a regulatory framework, other jurisdictions began to follow suit. Initially, perceptions of cryptocurrency and blockchain were varied, but ultimately more competent authorities and governments have been turning their attention to its uses and applications across almost every industry. Japan started to regulate digital asset exchanges, and Estonia has become a blockchain hub for developers and companies utilising DLT, along with Gibraltar. Bafin in Germany recently approved a tokenised bond offering to the public, MAS in Singapore are making big steps forward as is the FCA sandbox in the UK — I think generally financial institutions, regulators and governments share similar views that DLT can provide efficiencies in some form or another, so I expect to see ongoing development to frameworks globally.
8. What can other countries or nations do to tackle the shortage of blockchain skills that the globe currently faces?
As with any new technology, it takes time for the balance of skills required and the rapid growth of its use to normalise. Like any successful sector, it requires an effective relationship between government, regulators and the private sector. In Gibraltar, we have the government initiative of the Gibraltar Association for New Technologies (GANT), a regulator that understands the DLT space, and private sector initiatives like our own GSX Group Blockchain Innovation Centre (BIC). It’s a mixture of collaboration and cooperation that facilitates the growth of the blockchain community.
9. What does a ‘true fintech ecosystem’ entail?
The GSX Group is essentially a one-stop-shop for a client, using our ecosystem, which is our collective of companies. As a Group, we operate in three core pillars; Exchange Services, Technology Solutions and Financial Services. Whether you are a fund (traditional or crypto), an issuer of a bond or looking to break into tokenised securities, the GSX Group can provide end-to-end bespoke solutions, all underpinned by blockchain technology.
10. Favourite to win the Premier League this season?
I’ve been a long-suffering Arsenal fan, but with the strength and depth of Man City’s squad and with Pep Guardiola as their manager, it would be silly not to think they will be strong favourites to win the title, as well as Liverpool, with their successes from last season, they are probably going to add onto those, but with a strong summer transfer window I think we could potentially be dark horses in the race this year — at least to be in the top four — which means Chelsea, Man U and some other team in North London whose name I can’t recall will be our primary adversaries!
About the GSX Group
The GSX Group comprises the Gibraltar Stock Exchange (GSX), Gibraltar Blockchain Exchange (GBX), Juno Services, the Blockchain Innovation Centre (BIC) and the joint venture, Hashstacs Inc.. The Group’s ecosystem of companies aims to establish a new era of blockchain-powered finance, by providing a full-service suite to its clients. The efforts of the GSX Group are helping to bridge the gap between traditional finance and the developing blockchain industry, facilitating the move towards mass adoption and institutional participation.
To find out more about Gibraltar Stock Exchange, visit:
Website: https://GSX.GI/
Twitter: https://twitter.com/GibStockEx
LinkedIn: https://www.linkedin.com/company/gsx-limited/
Facebook: https://www.facebook.com/gsxlimited
Instagram: https://www.instagram.com/gibraltar_stock_exchange/
