The Security Token Alliance, an alliance that brings together organizations advancing the security token industry, is announcing that Fincross International is among the latest to partner with the Alliance.
The Security Token Alliance is founded on the belief that the present and future of digitized securities will benefit from wide participation in projects and an ecosystem for stakeholder connections. The organization was founded in May 2019 by Frederik Bussler.
Fincross International is an investment banking, securities and investment management firm specialized in traditional and digital assets. A pioneer in fintech, Fincross is developing a distributed ledger called Finex for the investment industry, which will foster a whitelisted network for investors, issuers and service providers to transact and run secure financial applications. Fincross will provide a range of digital investment products, services and APIs for institutional, corporate, intermediary and individual clients. We spoke with Henry James, Deputy CEO & CSO at Fincross International, to discuss the industry and our new partnership.
Why join the Security Token Alliance?
The Security Token Alliance was borne out of seeing the fragmentation and immaturity of a high-potential industry — Security Tokens. We established a powerful network of over 80 industry executives to combat this. James notes that the opportunities created by such an active group contributed to their decision to join:
"We are excited to join the Security Token Alliance as an opportunity to share and acquire knowledge with other active individuals and groups in the security token market."
Further, the Alliance was created with a deep belief that security tokens can greatly improve finance — if only industry players collaborate. Fincross shares a similar belief:
"Fincross International is an investment bank specialised in digital assets and we firmly believe that security tokens enable the opportunity for the creation of entirely new investment products as well as the prospect of bringing liquidity to illiquid assets. It’s for these reasons that we are passionate about this space and working with a variety of start-ups, early stage companies and listed companies on advisory, structuring, underwriting and book running of security token offerings and the tokenization of assets."
James notes important market trends among emerging client segments:
"Since mid-2018 we have been meeting with our investor network and analysing the demand for security tokens. By Q1 2019, we had observed a clear trend amongst those investors that expressed a clear appetite for security token investments. Two client segments emerged: institutional and family office/UHNW investors."
Through Fincross International's close ties to investor networks, James saw first-hand that fund managers are often interested in exotic products, while family offices are more open to "vanilla" products:
"Today we have over twenty fund managers in our network with mandates to buy security tokens and they are hungry for new and exotic investment products made possible by tokenisation with IRR of >15%. None of these groups have shown appetite for "vanilla" security tokens like real-estate backed security tokens."
While real-estate tokens are often touted as a great potential use-case for Security Tokens, James notes that the behaviour of institutional investors does not reflect demand for real-estate tokens.
"Real-estate products are available in abundance through traditional markets and infinitely more liquid today, so it doesn't make sense for institutional guys to buy real-estate security token deals."
Although institutional investors aren't interested in real-estate tokens for the aforementioned reasons, the story is different for family offices and ultra high-net-worth individuals:
"However, family offices and UHNW investors have the opposite approach and are showing demand for the "vanilla" security tokens as a long-term portfolio decision with the hope of being able to trade asset-for-asset once more investors come to the security token market."
The Security Token Alliance is currently signing and on-boarding a wide cross-section of respected security token professionals and organizations with the goal of broadening participation in digital assets in order to create the best financial outcomes for humanity.
For more information or membership inquiries, contact firstname.lastname@example.org.