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For the crypto market to become attractive to institutional investors, companies and their investors need to ensure that tokenized securities — digital assets subject to federal security regulations — can be as easily tracked and traded and exchanged as traditional stock shares.
Abacus, a young company that passed through Y Combinator this past summer, think its technology can make it so.
Picture - Abacus - Founder - CEO - Pradyuman
According to the picture painted by Abacus founder and CEO Pradyuman Vig, Abacus can both automate compliance for tokenized security transactions, and keep track of the chain of custody of private securities, making it simple for the SEC, among other parties, to audit the entire history of these securities transactions. Indeed, using the blockchain and its proprietary software, Vig says that Abacus can facilitate the issuance, administration, and settlement of tokenized financial instruments on the blockchain through smart contracts that it keeps track of via an on-chain storage layer.
The company’s goal, ultimately, is to make it easier to buy and sell private securities, as well as to make the process far more transparent. If it works, it could be a big deal, too. Consider that traditionally, funds and companies have experienced liquidity events either when they get acquired or sold or go public (or get liquidated). Meanwhile, because so much money has poured into the private market over the last decade, companies have pushed off all of these types of events for longer periods of time. That shift has given rise to secondary sales as we know them today, but Abacus thinks it can help usher in yet another way for startups and funds to exit their holdings: through secondary markets for tokenized securities.
Course - Idea - Market - Securities - Feels
Right now, of course, the mere idea of a secondary market for tokenized securities feels like a very distant possibility. As TC columnist Jon Evans noted over the...
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