Asset-Backed Tokens Will Change the World

By Roy Nicolet

Our team joined the SPOT Bitcoin Exchange Conference 2019 in Hong Kong at a wonderful venue at HKEX Connect Hall — the Hong Kong Stock Exchange. The event included many industry players and regulators active in the Asia Pacific. Our President of Aegis Custody, Michael McCarty, participated in a panel that discussed custody for digital assets and shared his experience of more than 20 years providing trust and custody financial services.

The conference was not only focused on the trending adoption of Bitcoin and other cryptocurrencies but also focused on the growth of asset-backed token orientation and its potential to change the world. Issuing tokens against real-world assets will remove many barriers for investors but will face many challenges.

The growth in issuance of asset-backed tokens will introduce a larger variety of investment opportunities for casual and institutional investors. In the near future, people will have access to tokens that represent existing assets that had never been traded in the market. The ability of an individual to purchase tokens for a variety of different asset classes could offer yield dividends from companies all over the world will be available in our smartphones. Additionally, institutional investors from this new variety of asset classes while individuals will benefit from Robinhood-like apps to invest in domestic and foreign tokens.

The blockchain and smart contracts are enforcing payments and provide transparency which is protecting investors from scams and a plethora of risks in today’s mainstream technology. Additional financial services are growing out of the blockchain, including custody, fund-raising, lending, asset management, trading, and much more. And, in legal and compliance, the technology will better enforce KYC/AML processes that will make the investment process faster, clearer and simpler. The once unsafe and volatile cryptocurrency market is transforming into a low-volatility high-liquidity investment avenue.

Regulators are increasingly understanding the power of blockchain technology and its benefits to society. They recognize the value in blockchain and are removing barriers to enable this technology around the world; in jurisdictions like Taiwan, the local government initiates sandbox committees to speed up technology adoption. The interest is clear, protecting investors from scams that were seen in the ICO mania. Truth be told, the overlapping characteristics of the assorted tokens — the infrastructure, medium of exchange and control — make it hard for regulators to create unified rules on time.

At Aegis Custody we develop technology to guard digital assets beyond cryptocurrencies. We believe that asset-backed tokens will prevail in the daily activities of exchanges, dealerships, and our smartphones as individual investors. We are proud to be granted a Trust and Service Provider license in Hong Kong and look forward to working with industry partners to enhance the tokenized revolution.

Roy Nicolet is a Strategy and Business Development Manager at Aegis Custody. He is a FinTech entrepreneur and an MBA Candidate at Stanford Graduate School of Business. Former Founder and CEO of Openhand. He holds a BSc. EE from the Technion- Israeli Institute of Technology.

Aegis Custody Company Limited is a wholly-owned subsidiary of AegisCo Holdings, a BVI company that also offers customizable self-custody solutions through its subsidiary Aegis Custody (Taiwan) and marketing and business development through AegisCo Capital Management (San Francisco, CA).