A Zug, Switzerland-based securities token offering, or STO exchange operator Smart Valor is setting its sights on becoming a window of opportunity for venture start-ups, real estate funds and other cash-hungry companies across the world to raise investments, aiming to give an easy and quick access to alternative investments.
Especially, the STO exchange operator sees big market opportunities in Korea, home to a concentration of technology-oriented venture start-ups, figuring out the way of how to lure them to launch their STOs on the exchange to raise money.
“Korea is one of the world’s top countries for innovations. And there are a lot of technology start-ups here in Korea, but they don’t have access to venture capital companies, which Silicon Valley companies have. Basically, Korea is a great crypto currency market, one of the top three in the world. So, the country is a perfect place for STOs, but unfortunately, there is no licensed STO exchange here in Korea,” said Olga Feldmeier CEO with Smart Valor AG.
Added she, “This will offer companies an opportunity to do STOs on another platform. What we are looking for is… We are looking for early stage Korean technology companies who want to list their securities tokens on our exchange platform.”
According to CEO Olga Feldmeier, listing securities tokens on the exchange is similar to the way that stocks are listed on the traditional public stock exchanges, as companies can issue their shares as security tokens.
Korea; perfect template for STOs
“If you have shares, you can issue tokens on the blockchain and sign a contract with regular shareholding companies. This is what’s called as security tokens. What is happening today as we speak is that real estate funds are tokenized and sold to investors in the form of cryptography tokens,“ she explained. The difference with ICO or initial coin offering is that STO is backed by real assets like shares and real estates, she told.
True enough, a growing number of real world assets like real estates, music albums, movie films, and even arts are being tokenized, as those companies involved are selling their shares in the assets as security tokens.
World Economic Forum estimates that 10% of global GDP, or US$10 to 12 trillion will be tokenized by 2020, moving into the blockchain platforms, as a growing number of venture capital companies, real estate funds, technology start-ups are issuing their shares as security tokens.
That’s where Smart Valor is angling to cash in on. Born out of Thomson Reuters Lab’s incubation program, Smart Valor is now on the way to becoming the first regulator-licensed European STO exchange, as the beta version of its exchange platform is in operation to go live for full commercial launch sometime between the 2nd quarter and 4th quarter of 2019. Once it gets into full operation, it will work as fully functional exchanges for STOs, and other digital assets like utility tokens and payment tokens.
On the way toward that goal, Smart Valor had already got a license in the 3rd quarter of 2018 from a financial regulatory body in Switzerland to operate as a financial intermediary. The exchange also was also registered in the Principality of Liechtenstein as a crypto-fiat exchange in the 4th quarter of 2018. The licenses from two different regulatory bodies in the two countries, especially Switzerland, one of 28 EU member companies, allow the exchanges to do business in the rest 27 EU member countries. Financial institutions registered with Liechtenstein has also advantages of trading with EU, as Liechtenstein is part of the Europe Economic Area.
Moreover, the licensed registration as STO exchange in Switzerland translates into great advantages for Smart Valor, as there is still no STO exchange in the world. Today, several hundreds of STOs are in operation, but there is no STO exchange, because it is very difficult to get a STO exchange license and to comply with the regulations of financial regulatory bodies. As financial regulatory bodies across the world require STO exchanges to be licensed and regulated not only to protect investors’ interests, but also ensure transparency, Smart Valor is uniquely poised to address this issue.
Smart Valor is also waiting for Liechtenstein’s financial regulatory body to approve its banking license application, which was made in the first quarter of 2019.
“What we do basically is two things. We tokenize and distribute alternative investments. Tokenization mean means that we take companies like start–ups, take their shares, create securities tokens and sell them in another exchange,“ added CEO Olga Feldmeier.
European version of Binance token
Asked about whether there are guidelines for prospective Korean venture start-up to refer to for listing their shares as securities tokens on the exchange, she said that the exchange has already written a 100-page whitepaper to give tips on how to issue securities tokens.
“Basically, what we are trying to achieve is to find companies who want to list securities tokens on the exchange,” she added
To further encourage the engagements of its customers, partners, and investors with the platform, the exchange has also issued its own native Valor tokens, which is will be transferred and deployed on its own platform.
Issued as ERC-20 token compliant to the public Ethereum blockchain, the Valor token is sort of utility and payments tokens.
Dubbed by the European version of Binance STO, the Valor tokens basically perform three functions in the very similar way that Binance tokens do –payment, stake, and vote.
For example, the Valor tokens can be used to pay for transaction fees and listing fees, because users can take discounts when paid for with the token. Traders can also stake them if they want to list security tokens on another platform. Holders of Valor tokens can also join survey and voting polls. Other functions are the use of them as a bridge currency for trading.
The Valor tokens will be listed on unspecified Asian cryptocurrency exchanges soon. "Today is a maiden time It can compare to the Cambrian explosion of digital assets,” stressed CEO Olga Feldmeier.