This strategic partnership will help increase the secondary market liquidity of digital securities issued on HighCastle’s Prime Issuance, Registry and Settlement Distributed Network (PrimeNet). Unlike public blockchains, such as Ethereum, PrimeNet is a secure permissioned distributed ledger built in accordance with the capital markets industry’s standards and accessible for issuance and settlement only through PrimeNet Members: regulated investment firms, brokers, exchanges.
“At HighCastle we provide companies and funds with a full technical and legal framework for compliant digital offering, issuance, distribution and transfers of securities on a distributed ledger and the opportunity to maintain a blockchain-based share register. By integrating with the Archax exchange, HighCastle will provide our issuers and their shareholders with the additional channel of trading and liquidity” - explains Philip Millar, Executive Director at HighCastle.
Tokenisation, the issuance of digital securities on a distributed ledger, provides a whole spectrum of advantages related to the ownership of securities in private companies. Some of these advantages have for decades been the prerogative of public securities only, such as liquidity premium. Others, like 24/7 trading, embedded compliance and automated dividend payments, are improved by the use of blockchain technology.
Archax plans to list tokenised assets of all types, providing that they meet its listing criteria. Initially its focus will be on the more illiquid assets like equity in private companies, debt, property, art and funds. However, in time this will expand to include highly liquid instruments like shares in public companies too.
Graham Rodford, CEO of Archax, stated, “The tokenisation of all asset classes globally will not only facilitate bringing liquidity to currently illiquid and hard to trade assets, but ultimately will disrupt all traditional financial markets too. Blockchain brings huge benefits in terms of the improved efficiencies and the difference it will make to the post-trade process will be truly transformational. HighCastle, with its focus on the issuance, distribution and management of digital securities, is perfectly placed to bring the benefits of blockchain to SME firms and funds, and we look forward to working with them as this exciting tokenisation ecosystem gathers momentum.”