ETH East — Ethereum’s Growth in Asia, 2019: Singapore
Let’s start with the Little Red Dot, Invest:Asia, and capital markets.
by Riley Kim, ConsenSys Asia-Pacific PR Lead.
For the international blockchain and cryptocurrency community, 2019 has been a year of stability and progress. A recap: Before Facebook announced Libra in June, JP Morgan Chase introduced JPM Coin in February. In the first successful trial between two central banks, the Monetary Authority of Singapore and Bank of Canada used blockchain technology to send each other digital currencies in May.
This was soon followed up with the Union Bank of the Philippines piloting a blockchain-based remittance from Singapore to the Philippines in partnership with Oversea-Chinese Banking Corp (OCBC). Recently, the Chinese government announced that it is developing a new central bank-issued digital currency that will carry some similarities to Libra on the same day its central bank said it’s releasing 900 billion yuan ($126 billion) into its economy to finance growth.
Blockchain development in Asia-Pacific continues to mirror how the region’s economy remains the world’s growth engine. Exciting news and projects are announced from Sydney to Seoul, and Shanghai to Singapore on a near-daily basis.
Discussing Capital Markets at Invest Asia
Last week, Singapore played host to Invest: Asia (FKA Consensus Asia). A flagship conference by Coindesk, Invest: Asia also kicks off a chain of events in the region that I have the honor of participating at in varying degrees, so this seems timely to start putting down some thoughts to digital ink.
ConsenSys Singapore was one of the earliest offices in the region, and is headed by management consultant Vinay Mohan. Just last month, he helped us become a founding member of OpenNodes, a web-based engagement platform started by our good friends at Tribe Accelerator and supported by the Infocomm Media Development Authority of Singapore (IMDA). If you have 5 minutes, I recommend a read on Vinay’s thoughts on the emergence of digital-only banks across Asia-Pacific and how that relates to our economy of trust.
Another member of our team here in Singapore is Daren Frankel, who was a panelist at Invest: Asia discussing the direction of token issuance in Asia. Daren led our partnership with global financing group CapBridge, jointly building 1exchange — the world’s first (and so far only) licensed and regulated private securities exchange on a public blockchain.
The motivation is closing a gap in today’s global capital market. Consider the limited options for fast-growing companies to fundraise beyond private rounds and the traditional IPOs and M&As. These companies may not be ready yet to go public or give up management control to mergers. 1exchange can be a very pragmatic stepping stone, where companies tokenize a fraction of their equity for funding, which in turn widen investable opportunities to accredited investors.
CapBridge picked Ethereum as it is the largest and most mature blockchain with over 70 million unique addresses created and a constantly growing user base — today Ethereum’s market cap tops $18 billion. Issuing on public Ethereum gives 1exchange the added potential of partnering other blockchain-enabled exchanges around the world, and presents international traders ease of use through a digital wallet.
Daren’s fellow panelists were Peter Shen, Head of Strategy and Innovation for Technology at Singapore Exchange, and Julian Kwan, CEO of InvestaCrowd. The session was be moderated by the ever-knowledgeable Christine Kim of Coindesk
The session was an insightful look at how capital market players view tokenization and digitalization. Julian of InvestaCrowd, which has launched 25 private equity deals, noted how paper-based shares have existed since the 1600s till today, and it could be argued there’s been no evolution for centuries in that regard. He explained the focus is on the quality of the equity offering.
Peter Shen of SGX agreed that the market has to be product driven. He pointed out how from a macro-view that the blockchain ledger is a part of the larger ecosystem, and thus it may have higher adoption in areas and for assets that are more suited for digitization. He added that a number of financial assets today are very decentralized. Bonds, fixed income and derivatives exist across hundreds and hundreds of emails and documents — the complexity of these assets could be what a distributed ledger is made for.
Christine Kim redirected the question to Daren: Did he agree that digitalization would replace one and perhaps a small part of the market. Daren’s response took a different approach and connected the panelists’ positions:
“I look at it differently. I don’t think investors invest in digital assets just because it’s digital. They invest based on their strategy. It’s up to us technologists to find out the best and most efficient way to do it. In the case of assets that’s not already trading, blockchain makes a good value proposition, and it’s possible we could see a public blockchain like Ethereum be the global settlement layer. When we are looking at this technology, we think what does it have to do on this single ledger, to move an asset. We are already seeing this with bitcoin; I can move my bitcoin from Coinbase to Binance to Bittrex, because there’s a common protocol that allows it.
And at a later Coindesk Live stream interview with Finder’s global crypto editor Andrew Munro to chat about enterprise adoption in Asia, Daren pointed out how ICOs were a precursor to the capital market getting digitalized. They were proof that we can list assets onto public blockchain reliably.
A snap of our team above! Vinay Mohan who looks after our Singapore office; Aiai Garcia our colleague in Manilla running APAC Business Development; Brianna Davis heads up our regional marketing; Joyce Lai from our legal team, and Daren Frankel who built up 1exchange here in Singapore
Fun Facts
This year marks 200 years since Sir Stamford Raffles first arrived and founded modern Singapore in 1819. The city state gained post-war independence only in 1965, and famed for its brand of realpolitik, is using its bicentennial to carefully examine its history and future. History buffs in town could find The Singapore Bicentennial Conference to their liking.
The UnionBank-OCBC cross border remittance was made possible with two ConsenSys-backed businesses: Kaleido, a blockchain business cloud, which runs UnionBank’s digital cash platform Project i2i, and Adhara, a liquidity and international payments platform. This week, Sophia Lopez, COO and co-founder of Kaledo, will be in Singapore for a panel at Milken Institute Asia Summit, an invite-only gathering of high-level audience of leaders across government, finance, philanthropy, academia and technology. Sophia is one of the few women leaders in blockchain with a STEM background so we are always excited when she visits.
Random Rumblings
Before 2020 sneaks up on us, here’s an introspective New York Times op-ed on how the meaning of time might be experienced differently between humans and horses. It’s from 2007, well over a decade since I first read it and I still think about it.
