Singapore Exchange SGX that is a public stock market in this country just backed a new trading platform for security tokens – the 1X platform. Also, it will get technical support from the Ethereum startup ConsenSys.
The 1X platform just went live
On Wednesday, the new 1X platform first listed the Ethereum token, that is possible to trade with Singapore dollars. Its value is about 7% of the shares of the Aggregate Asset Management (AAM), a Singapore found manager.
The foundation raised about $4 million in fiat money since May 4. All investors got the equal Ethereum tokens to account for their ownership, which is now tradable on 1X.
The purpose of creating the 1X platform is to provide a platform based on IPO but for private companies to increase capital and to boost liquidity in the primary capital market, using the public blockchain to verify transactions.
The 1X platform will take about 10-30% of private companies and put that into a particular design vehicle (SPV) … to back every created token for listing and trading. The overall idea is to bring liquidity to an otherwise historically illiquid asset, says the CEO of the X1 platform. They will start first with private companies, and in the future, with other illiquid assets like bonds or real estate, for example.
Global availability of the new Ethereum-based X1 platform
Capbridge is a Singapore-based exchange for primary market stock offerings, regulated by the Monetary Authority of Singapore. Its practically the Singapore’s central bank with a Capital Markets Services license. It also holds a Recognized Market Operator (RMO) license for the 1X platform.
Meanwhile, SGX stands out as a strategic investor in 1X, which means it not only has an equity stake, but the exchange is also included in all business operations.
The CEO Haiping Chaoo explains that each token represents actual company securities, and currently, it’s representing common shares, but they may extend to other share types and different types of securities such as convertible bonds.
The Ethereum blockchain will replace the traditional settler position, and the exchange points to lessen operational costs and make it available for global shareholders, beside the 1,000 accredited investors on the platform.
Traders located in Singapore must gate the platform with at least $220,000 of annual income and $1.5 million in net worth to get the accreditations. On the other hand, there’s no minimum demand for outside investors as long as they pass the know-your-customer (KYC) process.
What is the role of ConsenSys?
The blockchain software studio headquartered in New York, built by the Eethereum co-founder Joseph Lubin, also contributed to the creation and design of the 1X platform. It is also called the modified ERC-20 token.
This design needs to allow the transactions of the securities-backed Ethereum tokens to be visible on the network like any other ERC-20 tokens.
However, they do not give custody of the assets directly to users, as the trading of 1X’s shares is a question to many compliance checks.
This happens because of all of the 1X platform’s listings are ordered to be entirely stored by a third-party custodian licensed and governed by the Singapore jurisdiction.
So, the 1X platform operates as a centralized exchange. It does not keep investors’ private keys, and for every sale or purchase inside the trade, transactions made on blockchain are required to go through the third-party custodian.
The company said they designed it to be a fully compliant, scalable and standardized, targeting global companies and investors.