bankingciooutlook

STGX: Impacting the Finance Sector. A new Frontier

By Banking CIO Outlook | Wednesday, March 27, 2019

Blockchain’s impact on the banking industry is huge. Although the impact is significant, the technology is not expected to replace traditional financing. On the contrary to popular opinion, there are those who believe that cryptocurrencies will crash to zero. The blockchain is essentially a ledger with every bitcoin transaction with details.

Singapore-based STO Global-X released its end to end security token platform partnered with BMI Capital Partners International and Coin street Partners, STGX, officially. The blockchain-based platform aims to allow compliant security tokens to be issued, managed, and traded on the secondary market. STO Global-X is uniquely positioned as a catalyst and enabler for companies seeking to explore this new mechanism to capitalize market opportunities through Security Token Offerings (STO), while also facilitating the adoption of digital assets in the mainstream. STGX is reported to enable licensed institutions and digital asset exchange operators to offer tangible and intangible asset tokenization, including securities. The platform is set to facilitate not only the creation of security tokens, but through a fully compliant process, investing, trading, and owning digital assets. The STGX team also noted that the new platform was designed to operate with a high level of interoperability. External applications and systems can be integrated with STGX as well as industry-specific solutions. This integration may include areas such as issuance, digital asset custody, high-frequency trading, market making, payment processing, international settlements, and even future industry standard protocol adoption.

Blockchain eliminates third-party intermediaries like banks, to create permanent and secure records with regard to transactions. This database is cryptographically secured to prevent tampering of current and previous transactions. Implementing them could save the banks millions, and at the same time, reduce the amount of paper that they process. Blockchain technology keeps track of transactions better than the existing protocols, like the Society for Worldwide Interbank Financial Communication (SWIFT), which is outdated. Distributed ledgers bring the consumer closer to real-time transactions. Blockchain decentralizes trust, enhances security, decreases the cost, and increases efficiency. In fundraising, blockchain takes the form of an initial coin offering (ICO). ICOs are on a global scale, so raising money is easy, and the number of investors is exponential.

The blockchain is the latest advancement that is applicable to a variety of industries, the financial sector being the major one. Blockchain could become the fortitude of the banking sector and be beneficial to the consumers as well.

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