Article By Rebecca Campbell
Securitize, a compliance platform and protocol for digitizing securities on the blockchain, has revealed that it’s one of 10 companies to join the IBM Blockchain Accelerator program.
Speaking of the announcement, Carlos Domingo, co-founder and CEO of Securitize, said that their “goal is to build the world’s first debt issuance platform with blockchain technology in 2019.”
With the aid of IBM, we hope to modernize the $82 trillion dollar corporate debt market – which is currently riddled with inefficiencies and high fees – with blockchain technology, he added.
The program is to last three months and will include a Blockchain Architecture workshop, in addition to the opportunity to work with the IBM team and external mentors, Domingo explained. At the end of the program, Securitize will present a demonstration of their platform, explaining what they want to build for potential customers, including internal IBM teams.
Domingo noted that they are planning to integrate Hyperledger into the product design of their platform, which will enable debt issuance on the blockchain.
Hyperledger is an open source collaborative effort hosted by The Linux Foundation that has been created to advance cross-industry blockchain technologies. Some of its members include Airbus, American Express, Cisco, Citi, Deloitte, Deutsche Bank, Huawei, IBM, JPMorgan, PwC, Ripple and Tencent to name a few.
With the use of Securitize’s Digital Securities (DS) protocol, it’s aiming to provide automated compliance to a private share that can then be traded. With the aid of the blockchain, the platform is hoping to deliver a modern solution for the finance industry. At present, ensuring compliance for a private share can often take weeks or months, Domingo stated.
The primary issues with issuing corporate debt are the high-costs, inefficient processes and the multiple actors that participate in the deal execution part, said Domingo. Integrating blockchain technology into the whole corporate debt process will help enable greater transparency, audibility, efficiency, and eliminate intermediaries that don’t need to be there.
Additionally, the DS protocol delivers instant settlement when an investor purchases a fraction of the security, he added. Currently, traditional private shares are paper-based while the settlement and custody of those shares can take time.
According to the Securitize website, the DS protocol has the “highest adoption rate in the market today and provides a seamless compliant integration solution for issuers, investors and exchanges throughout the entire digital security lifecycle, from initial issuance to trading, distribution, and governance.”
A few of the digital security issuers it’s powering include Blockchain Capital, 22x, SPiCE VC, Augmate, Aspencoin, Lottery and Science Blockchain.
“As the leader in enterprise blockchain, IBM is proud to welcome Securitize and nine others to the inaugural IBM Blockchain Accelerator program,” said David Post, managing director at IBM Blockchain Ventures. “The participants have been chosen for their promising use cases and dedication to building scalable blockchain networks that have the power to transform existing business processes.”
The other nine blockchain companies include Lucidity, a marketing analytics company for digital advertising; TigerTrade, an international B2B marketplace for trading excess retail inventory with a focus on emerging markets; Phunware, a fully integrated enterprise software platform for mobile; Connecting Food, which is providing digital solutions to create transparency in the food supply chain from farm to fork; Ferrum, an equipment lease financing company; Bandwagon, a ticket authenticity and fan identity management company; IPwe, a platform where the patent ecosystem can come together to transact, interact and communicate; MetaMe, a universal wallet and smart data marketplace; and Credly, which is empowering organizations to recognize individuals for demonstrated competencies and skills.