Singapore Exchange Backs Launch of New Security Token Trading Platform

Asia Blockchain Review
July 24, 2019

Singapore’s public stock market, Singapore Exchange Ltd (SGX), has backed the launch of a new trading platform for security tokens with the support of Ethereum startup ConsenSys. 

As reported by CoinDesk, the 1X platform went live this month with its first listing of an Ethereum token. Purchasable with Singapore dollars, the token represents about 7% of the shares of Aggregate Asset Management (AAM), a Singapore fund manager. 

Satisfying Interoperability Needs and Regulatory Requirements

The manager raised some US$4 million in fiat currency in the six weeks since May 4, 2019. To account for their ownership, now tradable on 1X, investors in the round received corresponding Ethereum tokens.

For its part, New York-based ConsenSys helped design a solution for 1X to issue “modified ERC-20 tokens” in order to satisfy interoperability needs and regulatory requirements.

This design essentially makes transactions of the securities-backed Ethereum tokens visible on the Ethereum network like any other ERC-20 tokens, but without giving users direct custody of the assets.  

Raising Capital and Increasing Liquidity via Public Blockchain

1X was launched with the aim of providing a platform similar to an initial public offering (IPO), but for private firms to raise capital and increase primary market liquidity by implementing a public blockchain network to validate transactions.

The platform was developed by Capbridge, a Singapore-based exchange for primary market stock offerings that holds both a capital markets services (CMS) license and a recognized market operator (RMO) license for 1X.

As a strategic investor in 1X, SGX not only has an equity stake but is also involved in its business operations. 


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