Archax, the FCA regulated digital asset exchange, broker and custodian, just announced the launch of its tokenisation engine – enabling the creation of tokens backed by any regulated or unregulated real-world or traditional asset. Leveraging the benefits of Web 3.0 and blockchain technology, this new service will allow Archax to roll out token representations of existing assets, starting with blue-chip UK traditional equities and funds to trade alongside new cryptoassets.
Whilst the cryptoasset market generally has experienced challenges in recent months, Archax believes that there is now a real focus from institutions on combining what has been pioneered in the digital asset space with traditional asset classes to enable them to be traded as natively digital-based instruments.
Graham Rodford, CEO and co-founder of Archax, commented: “The recent LawtechUK paper provided the last piece of the puzzle, confirming the legal standing of tokens in UK securities law. As the UK’s first FCA regulated digital securities exchange, we are now building on this to pave the way to make traditional assets interoperate with Web 3.0”.
With the recent successful launch of its regulated digital asset custodian and its primary raise platform, Archax is now creating tokens backed by top listed traditional equities which they plan to trade on their exchange. This will be followed with treasury instruments, carbon credits and a number of tokenised fund projects, as well as other innovative cryptoasset instruments resulting in a true multi-asset venue.
Once in digital token form, representations of assets, such as equities, will ultimately deliver multiple benefits and efficiencies, including 24×7 trading, streamlined corporate actions as well as the potential for new forms of defi collateral. For assets like funds, benefits include opening up new potential investor bases and creating secondary markets for trading outside of redemption cycles.
These traditional asset-backed tokens also provide interesting new exposure for firms already operating in the crypto space, offering access to less volatile instruments within those digital rails, as well as leveraging cross-collateralisation opportunities in the Web 3.0 DeFi space – such as borrowing and lending.
“Whilst others have announced similar initiatives in the past, we believe that this is the first time a regulated custodian holds the underlying asset in trust and then issues regulated tokens representing those assets that can be traded within the same ecosystem”, continues Rodford. “All of these tokens are permissioned only to those that have been through our KYC/AML process, and in this way, we can add comfort to institutional players that they are always interacting with known participants.”
The Archax institutional, digital asset ecosystem provides the broadest range of products and services available – from fundraising to tokenisation to custody to junior market to full-blown exchange. It also covers a broad range of assets – from cryptocurrencies to tokenised assets to digital securities to NFTs. As such, it provides the ideal regulated partner for firms wishing to explore this innovative space.”