DSTOQ: Exchange without Borders!?
Interview with Craig McGregor — CEO of DSTOQ
1. What problem is DSTOQ trying to solve?
DSTOQ’s primary goal is to improve global access to capital markets. For the crypto industry our Security Token platform provides the ability to hedge their portfolio. We also aim to foster economic inclusion in multiple ways, such as giving individuals in emerging markets direct access to investment opportunities in stable and high-growth assets such as government bonds, stocks, ETFs, gold and more. We remove intermediaries thereby significantly lowering costs and other pains associated with current options. We will also help companies and entrepreneurs, especially in high-growth and emerging markets, gain access to capital.
2. Who is eligible to buy and sell Security Tokens on DSTOQ?
At the present moment, DSTOQ is available to all individuals residing outside of the US, China, and sanctioned countries, who are excluded for regulatory reasons. Individuals who wish to buy and sell Security Tokens on the DSTOQ platform will also need to go through a routine KYC and AML process.
3. What is an investor’s advantage in trading via the DSTOQ platform compared to a traditional securities exchange?
Traditional securities exchanges strictly cater to institutional clients. Retail investors, also known as individual investors, cannot invest directly, but rather through a broker and a variety of other intermediaries.The major downside of this is that you never really control your own assets, and are forced to trust an institution to do it for you. In addition, for those many individuals who want to invest across borders, or live in places without local stock exchanges and want to invest — they are forced to pay extremely high fees.
The decentralized DSTOQ platform, which is built on the Stellar blockchain, allows for direct investment with minimal fees. We also grant users true control — those who buy and sell on the platform are always in control of their funds and their private keys.
4. What are the biggest advantages of tokenizing securities?
Capital markets are currently designed in an unequal manner, not affording the same opportunities to everyone. By tokenizing securities, DSTOQ will allow virtually anyone, especially in emerging markets, to participate in the global capital marketplace.
Customers of DSTOQ can acquire our utility token, DSQ, on our platform, which can then be used to buy Security Tokens. Tokenized securities means lower fees, speed, simplicity, and privacy.
5. When will I be able to trade Security Tokens on your exchange?
Currently, you can test out our MVP at https://app.dstoq.com/. The first iteration of the DSTOQ platform will be available in Q4 2018.
6. What kind of Security Tokens will I be able to trade on DSTOQ?
The DSTOQ platform will enable trading of tokenized securities such as stocks, funds, commodities, real estate, or government bonds. In our second phase our Security Tokens we aim to offer STOs that other companies have created.
7. How does the DSTOQ tokenization process work?
Tokenization is a conversion process whereby assets are digitized into Security Tokens. The underlying securities are held by a licensed and regulated entity called a custodian, who is responsible for making sure each Security Token is linked to a real-world asset held in the vaults. The Security Tokens generated during this process represent legal ownership and rights to the token holder, who is the lawful owner of the asset. These tokens can then be traded peer-to-peer between traders on the DSTOQ exchange.
8. What happens with my tokens (ownership rights) if DSTOQ goes out of business?
We build standards for our tokenization such that the owner of the Security Token always has the legal ownership and rights to the assets. Even if DSTOQ ceases to exist in the future, Security Token holders can redeem the assets from the custodian or, in case of fractional ownership redeem the equivalent value in cash.
9. What is your biggest challenge in launching a Security Token exchange?
Gaining necessary regulatory approval takes time and this is where we feel we have overcome a difficult challenge. DSTOQ spends a great deal of time working very closely with blockchain regulatory bodies and lawmakers. Security Tokens are strongly regulated, as they should be, and we believe that operating within a sensible legal framework is necessary to increase mass-adoption of cryptocurrencies and blockchain technology for practical use cases. We are fully licensed to operate, after having gone through a lengthy process. With this process behind us, DSTOQ can focus all energy on launching our platform.
10. What are the biggest upcoming challenges for DSTOQ?
I wouldn’t call it a challenge persay, as we are fully prepared and confident, but a very significant next step for us is educating ordinary individuals on the benefits of and how to use digital assets; how to take advantage of the opportunities which Security Tokens are bringing to the world. The digital assets sphere oftentimes appear intimidating and complex, but with the right guidance, it is quite intuitive and simple. As a company, we will spend a great deal of time building accessible and educational tools for the investor community to better prepare and enable them to take advantage of the many investment opportunities now available to them with DSTOQ.
Thank you for the interview.
Note: This interview was conducted on 31.10.2018